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An investment that currently sells for $120 makes payments every year forever, which grow at 7%...

An investment that currently sells for $120 makes payments every year forever, which grow at 7% annually. If the next payment amount is $6, what is the annual return on this investment?

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Answer:

Annual return on investment = Next payment amount / Current price

Annual return on investment = $6/$120

Annual return on investment = 5%

Let me know in case of any quetsions.

jeff jeffy answered 2 years ago
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