Computing the annual rate of return

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Toyota Motor Credit Corporation (TMCC), a subsidiary of Toyota Motor, offered some securities for sale to the public on March 28, 2008. Under the terms of the deal, TMCC promised to repay the owner of one of these securities $100,000 on March 28, 2038, but investors would receive nothing until then. Investors paid TMCC $24,099 for each of these securities.

a. Based on the $24,099 price, what rate was TMCC paying to borrow money?

b. Suppose that, on March 28, 2019, the security's price is $42,380. If an investor had purchased it for $24,099 at the offering and solid it on this day, what annual rate of return would she have earned?

c. If an investor had purchased the security at market on March 28, 2019, and held it until it matured, what annual rate of return would  she have earned?

Reference no: EM131087198

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