Question
In: Finance
A local bank is running the following advertisement in the newspaper: "For just $5,000we will pay...
A local bank is running the following advertisement in the newspaper: "For just $5,000we will pay you$250forever!" The fine print in the ad says that for a $5,000
deposit, the bank will pay $250 every year in perpetuity, starting one year after the deposit is made. What interest rate is the bank advertising (what is the rate of return of this investment)?
Solutions
Expert Solution
The equations for a perpetuity and annuity are derived from the assumption that the first cash flow will occur 1-‐period ahead in time.
jeff jeffy answered 2 years agoRelated Solutions
1. A local bank is running the following advertisement in the newspaper: "For just $ 4,000...
1. A local bank is running the following advertisement in the
newspaper: "For just $ 4,000 we will pay you $ 240forever!" The
fine print in the ad says that for a $ 4,000 deposit, the bank will
pay $ 240every year in perpetuity, starting one year after the
deposit is made. What interest rate is the bank advertising (what
is the rate of return of this investment)?
The interest rate the bank is advertising is.....?% (round to
nearest integer.)
In the USA, Read the following advertisement that appeared in the community newspaper where you live....
In the USA, Read the following advertisement that appeared in
the community newspaper where you live. Do you think the
advertisement violates any of the ethics rules? Explain the reasons
for your answer.
IRS TAX TERMINATOR, A Professional Services Corporation We have
ten CPAs on staff and provide a full range of tax services. We
guarantee a tax refund or you pay nothing for our services. Call us
at (999-777-7711). Your call will be routed to one of our tax...
In the USA, Read the following advertisement that appeared in the community newspaper where you live....
In the USA, Read the following advertisement that appeared in
the community newspaper where you live. Do you think the
advertisement violates any of the ethics rules? Explain the reasons
for your answer.
IRS TAX TERMINATOR, A Professional Services Corporation We have
ten CPAs on staff and provide a full range of tax services. We
guarantee a tax refund or you pay nothing for our services. Call us
at (999-777-7711). Your call will be routed to one of our tax...
Read the following advertisement that appeared in the community newspaper where you live. Do you think...
Read the following advertisement that appeared in the community
newspaper where you live. Do you think the advertisement violates
any of the ethics rules? Explain the reasons for your answer.
IRS TAX TERMINATOR, A Professional Services Corporation We have
ten CPAs on staff and provide a full range of tax services. We
guarantee a tax refund or you pay nothing for our services. Call us
at (999-777-7711). Your call will be routed to one of our tax
experts who will...
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Probability is=
Just before Quebec referendum on sovereignty, a local newspaper polls 400 voters in an attempt to...
Just before Quebec referendum on sovereignty, a local newspaper
polls
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Suppose that
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probability that the
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Juliana just deposited $5,000 into an account at The Compound Bank. The bank will pay 4.5...
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The following appeared in a brief article in a major business newspaper: A local court is...
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Letter to the editor for local newspaper regarding obesity?
Letter to the editor for local newspaper regarding obesity?
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