An Investor has deposited $25,400 for a year. It has become $28,200. Calculate the rate of...

An Investor has deposited $25,400 for a year. It has become $28,200. Calculate the rate of return in a year.

Expert Solution

Initial Deposit(P0) = $25,400

Deposit value in a year(P1) = $28,200

calculating the rate of return of deposit:-

Rate of Return = (P1 - P0)/P0

Rate of Return = ($28,200 - $25,400)/$25,400

Rate of Return = 11.02%

so, the rate of return in a year is 11.02%

jeff jeffy answered 2 years ago

A year ago, you deposited $30,000 into a retirement savings account at a fixed rate of...

A year ago, you deposited $30,000 into a retirement savings account at a fixed rate of 5.5 percent. Today, you could earn a fixed rate of 6.5 percent on a similar type account. However, your rate is fixed and cannot be adjusted. How much less could you have deposited last year if you could have earned a fixed rate of 6.5 percent and still have the same amount as you currently will when you retire 38 years from today?

Calculate the benefit, based on the forward rate agreements, that an investor can derive if his...

Calculate the benefit, based on the forward rate agreements, that an investor can derive if his / her expectations of future interest rate movements are verified: a. 3% after two months b. 2.8% after three months c. 2.5% after one month d. 1% after five months e. 2.9% after six months Fowrard rate agreements Terms Bid Ask 1 x 4 2.840 2.860 2 x 5 2.815 2.835 3 x 6 2.795 2.815 4 x 7 2.800 2.820 5 x 8...

Calculate the rate of return to an investor who buys one call option contract on common...

Calculate the rate of return to an investor who buys one call option contract on common stock of XYZ with exercise price of $150 and maturity of six months for $10.20 per option if an actual market price of XYZ in 6 months is $160. Input your answer in %

An investor is considering the purchase of a 2 year bond with a 5.5% coupon rate,...

An investor is considering the purchase of a 2 year bond with a 5.5% coupon rate, with interest paid annually. Assuming the following sequence of spot rate: 1 year , 4% and 2 year, 3% the yield to maturity of the bond is: A. 3.5% B. 3.03 % C. 3.98%

An investor buys a 5-year bond with a coupon rate of 6.5% at a price that...

An investor buys a 5-year bond with a coupon rate of 6.5% at a price that reflects a yield to maturity of 10.9%. Interest is paid semiannually. Exactly one year later, after receiving the second coupon payment, the investor sells the bond for 97% of par value. What was the investor’s rate of return on the bond investment for the year? Enter your answer as a decimal out to four decimal places. As an example, you would enter 1.146% as...

Suppose that an investor has 8-year investment horizon. The investor is considering a 15-year semi-annual coupon...

Suppose that an investor has 8-year investment horizon. The investor is considering a 15-year semi-annual coupon bond selling at $990 (par value is $1000) and having a coupon rate of 4%. The investor expectations are as follows: • The first 4 semi-annual coupon payments can be reinvested from the time of receipt to the end of the investment horizon at an annual interest rate of 4%, • the first 8 semi-annual coupon payments can be reinvested from the time of...

George deposited $10,000 in an account with the rate of return of 4%

George deposited $10,000 in an account with the rate of return of 4%. He withdrew $500 from the account in year 2 and increased the amount of his withdrawal by the same amount of $500 every year after that. What is the year number in which he will make the last withdrawal?Please solve using formulas and not Excel.

An investor considers investing 100 000 TL for the next year. This investor has 3 options....

An investor considers investing 100 000 TL for the next year. This investor has 3 options. The first option is to buy a government bond that sells 100 TL. The par value of this government bond is also 100 TL and the remaining maturity is 1 year. This government bond pays %20 annual coupon interest. The second option is to buy a commercial paper which sells 2200 TL discount. The par value is 10 000 TL and the maturity is...

An investor considers the purchase of a 2-year bond with a 5% coupon rate, with interest...

An investor considers the purchase of a 2-year bond with a 5% coupon rate, with interest paid annually and par of 100. The spot rates observed in the market today are as follows: 1-yr spot is 3%, the 2-yr spot is 4% and the 3-yr spot is 5%. The clean price of the bond is closest to: a. 101.93. b. 102.85. c. 105.81. d. 102.36. e. 103.10.

1. One year ago, XYZ deposited $5,400 in an account that has earned and will earn...

1. One year ago, XYZ deposited $5,400 in an account that has earned and will earn 12.3% per year in compound interest. If PQR deposits $8,700 in an account in 3 years from today that earns simple interest, then how much simple interest per year must PQR earn to have the same amount of money in 7 years from today as XYZ will have in 7 years from today? Answer as an annual rate. A. A rate less than 6.00%...

Question