Calculating Rates of Return [LO 3] In March 2018, Daniela Motor Financing (DMF), offered some securities for sale to the public. Under the terms of the deal, DMF promised to repay the owner of one of these securities $5,000 in March 2053, but investors would receive nothing until then. Investors paid DMF $820 for each of these securities; so they gave up $820 in March 2018, for the promise of a $5,000 payment 35 years later. a. Assuming you purchased the bond for $820, what rate of return would you earn if you held the bond for 35 years until it matured with a value $5,000? (Do not round intermediate calculations and enter your answer as a percent, rounded to 2 decimal places, e.g., 32.16.) b. Suppose under the terms of the bond you could redeem the bond in 2028. DMF agreed to pay an annual interest rate of 1.3 percent until that date. How much would the bond be worth at that time? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. In 2028, instead of cashing in the bond for its then current value, you decide to hold the bond until it matures in 2053. What annual rate of return will you earn over the last 25 years? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a. Rate of return % b. Bond value c. Rate of return %

Answers

Answer 1

The rate of return over the last 25 years is approximately 0.83%.                                    To calculate the rate of return, we can use the formula:

\((Ending Value / Beginning Value)^(1/n) - 1. In this case, the Beginning Value is $820 and the Ending Value is $5,000.\) The time period is 35 years, so n = 35.


Plugging these values into the formula, we get: Rate of Return =\(($5,000 / $820)^(1/35) - 1.\)
Calculating this, the rate of return is approximately 3.48%.
To calculate the bond value in 2028, we need to determine the present value of the $5,000 payment in 2028.
We can use the formula: Present Value = Future Value / (1 + Interest Rate)^n.
In this case, the Future Value is $5,000, the Interest Rate is 1.3%, and the time period is 2028 - 2018 = 10 years.
Plugging these values into the formula, we get: Present Value = \($5,000 / (1 + 0.013)^10.\)
Calculating this, the bond would be worth approximately $4,568.63 in 2028.
To calculate the rate of return over the last 25 years, we can use the same formula as in part a.
However, now the Beginning Value is $4,568.63 and the Ending Value is $5,000.                                                            The time period is 25 years, so n = 25.
Plugging these values into the formula, we get: Rate of Return =\(($5,000 / $4,568.63)^(1/25) - 1.\)
Calculating this, the rate of return over the last 25 years is approximately 0.83%.

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Related Questions

ASAP!!!!!!!! Would give a lot of points!!!!!
Assume that the output gap is estimated to be $156 billion and the government decides to take action. If the marginal propensity to consume is 0.75, by how much would it need to change government spending to close the gap? Show your work.

Answers

Answer:

$39 billion

Explanation:

Given marginal propensity to consume is 0.75,

the Spending Multiplier = 1 / (1 - MPC) = 1 / (1 - 0.75) = 1 / 0.25 = 4

To close a gap of $156 billion, the government needs to change spending by $156 / Spending Multiplier

= $156 /4

= $39 billion

3. ______ are defined as goods or services that are required for health and safety.

Answers

Occupational Health and Safety are defined as goods or services that are required for health and safety. Information standards are guidelines governing the information that must be provided to consumers when they purchase specific goods.

What is the safety of goods?

A safe product is one that delivers either no risk or a minimum tolerable level of risk, taking into account the product's typical or reasonably foreseeable use and the need to maintain a high level of consumer protection.

Occupational health and safety is a multidisciplinary discipline that deals with all elements of workplace health and safety, with a heavy emphasis on preventing workplace dangers.

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which of the following is an assumption of theory x? people like to work. workers must be closely supervised. workers want responsibilities. people are self-motivated. do you need a hint? clickable icon to open hint

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Theory X explains that people are only motivated to work when they are aware that they are under close supervision or that they will be rewarded for the work they have accomplished.

Developed by American management professor Douglas McGregor, Theory X is a theory of workplace motivation. According to this theory, no one actually enjoys working or accepting responsibility, and everyone actually despises it. Theory X explains that people are only motivated to work when they are aware that they are under close supervision or that they will be rewarded for the work they have accomplished. In this way, theory X is intimately tied to the premise given since theory X contends that a person must be regulated in order to function. One of the ideas of work and motivation as it relates to certain workers is this one. It was developed by Douglas MacGregor. These presumptions are made. 1. That many individuals despise working and will do anything to escape it. 2. People lack ambition. They would rather stay out of trouble. 3. Since people must be directed, they must be made to work.

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Betty's employees' performance is the lowest of the company. Most of Betty's employees have
been with the company less than 2 years. Those that have been with the company for more
than 2 years are visibly unhappy at the company. These results are drastically different than
most of the other teams in the company.

Do you think Betty is a good manager? List facts that support your decision

Answers

Answer: Define job performance, organizational citizenship, absenteeism, and turnover.

Explain factors associated with each type of work behavior.

One of the important objectives of the field of organizational behavior is to understand why people behave the way they do. Which behaviors are we referring to here? We will focus on four key work behaviors: job performance, organizational citizenship behaviors, absenteeism, and turnover. Note that the first two behaviors are desirable ones, whereas the other two are often regarded as undesirable. While these four are not the only behaviors organizational behavior is concerned about, if you understand what we mean by these behaviors and the major influences over each type of behavior, you will gain more clarity about analyzing the behaviors of others in the workplace.

Explanation:

how might you use your knowledge of taxes to make sound financial decisions?

Answers

Answer: If you know about taxes you can make better financial descisions because most descisions are made thru taxes. Taxes are numbers and stats that allow us to determine whether or not to buy something.

Explanation:

taxes also show how inflated a market is

The legal system in the United States is based on _____.
A. constitutional law
B. common law
C. small law
D. statutory law​

Answers

Common law is the answer hope this helps!

in October 2001 president George w bush gave directions to establish the office of homeland security and the homeland security council. what is this an example of? A. treaty B. executive order C. agency regulation D.Statute

Answers

Answer:

agency regulations i think

Discuss how you react to changes in the environment. For example, there is a change in your class schedule or a change in the price of your favorite food. Report on your reaction to changes in the environment.
- 

Answers

Answer: my reaction would probably not be good

Explanation:

what do you pore first the cereal or the milk? True or false.

Answers

Well this is a HUGE ARGUMENT in my family... I personally add the cereal THEN the milk (even tho I don’t rlly like milk ok) but my parents say you need to add milk first. But I wonder how will you eat dry cereal when milk is st the bottom? WTH

Your credit card has a credit limit of $1,000. Your credit card company reviews your credit line every 6 months.

Answers

The time it will take to increase the limit to $1,600 is 2.5 years, when the credit card has a credit limit of $1,000.

What is a credit card?

A credit card is a payment card issued to users or cardholders to enable the cardholder to pay a merchant for goods and services based on the cardholder's accrued debt that is promised to the card issuer to pay them for the amounts plus the other agreed charges. The card issuer usually a bank or credit union creates a revolving account and grants a line of credit to the cardholder, from which the cardholder can borrow money for payment to a merchant or as a cash advance.

A credit card is different from a debit card.

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Your question was incomplete, your full question probably was:

Your credit card has a credit limit of $1,000. Your credit card company reviews your credit line every 6 months. They will not increase your credit line more than 10% each 6-month period. Assuming they increase your limit each 6-month period by 10%, how long will it take to increase your limit to $1,600?

Fixed costs are $900000 and the variable costs are 60% of the unit selling price. What is the break-even point in dollars

Answers

Based on the fixed cost and the variable cost percentage, the break-even point in dollars is $2,250,000.

What is the breakeven point when given the variable cost percentage?

When you have the fixed cost and the variable cost percentage, the break-even point in dollars is:

= Fixed cost / Contribution margin ratio

= Fixed cost / (1 - Variable cost percentage)

Solving gives:

= 900,000 / ( 1 - 60%)

= $2,250,000

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Specialty Products Company has a high turnover rate among its employees, especially those
who are young parents. Solution to this problem

Answers

The company has to first investigate the reason why young parents are leaving the company. This is the first step towards resolving the issues of high turnover.

If it is because of the inability to care for their kids while at work, then the company can solve this problem by:

First modifying the company policy to allow mothers to bring their babies to work;Second, providing a safe place within the workspace for the children to play during work hours.Third, a flexible work structure can be given to young parents.

What is high turnover?

Turnover in human resources refers to the act of replacing one employee with a new employee. Termination, retirement, death, interagency transfers, and resignations are examples of separations between organizations and personnel.

Turnover in human resources refers to the act of replacing one employee with a new employee. Termination, retirement, death, interagency transfers, and resignations are examples of separations between organizations and personnel.

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Arrange the following revenues in the federal government, from greatest to
least.
Drag each item to put them in the correct order.
(2 points)
= excise taxes
= Social Security and Medicare taxes
= corporate income taxes
= individual income taxes
= customs duties
= miscellaneous revenue

Answers

Individual income taxes
Social Security and Medicare taxes
Corporate income taxes
Excise taxes
Custom duties
miscellaneous revenue

the economic system in the united states is called a ____ economy
- market
- mixed
- command
- traditiol

Answers

Answer:

Mixed Economy

Explanation:

Hope this helps

Mixed economy Hope I’m right

Monopolistic competitors maximize profit by: Question 2 options: Adjusting output at a given price Adjusting price for a given output Adjusting output and price Cheating

Answers

Monopolistic competitors maximize profit by adjusting output and price. In a monopolistic competition market structure, firms have some degree of control over price and can differentiate their products from competitors.

To maximize profit, monopolistic competitors need to find the optimal combination of output and price. By adjusting the quantity of output produced, firms can align their production levels with consumer demand. If the demand for their product increases, firms can increase their output to meet the higher demand. Conversely, if the demand decreases, firms can decrease their output to avoid excess inventory and minimize costs.

In addition to adjusting output, monopolistic competitors also need to consider price. They can manipulate the price of their product to maximize profit. This involves setting prices that are higher than the marginal cost of production but still attractive to consumers. By setting a price that reflects the perceived value of their differentiated product, firms can capture a larger market share and generate higher profits.

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Anna's job pays $10 per hour, and she works 40 hours per week. Her tax rate is 20 percent. Assuming she works 50 weeks per year, the amount she will pay in taxes is $4,000 $14,000 $20,000 $30,000

Answers

She will pay in tax4,000

What volume of each of the following acids will react completely Nith 20.00 mL of 0.100MNaOH ? a. 0.250MHCl Volume =mL b. 0.250MHNO 3

Volume =mL c. 0.250M HC 2

H 3

O 2

(1 acidic hydrogen) Volume = mL

Answers

The volume of 0.250 M HC2H3O2 required to react completely with 20.00 mL of 0.100 M NaOH is 8.00 ml.

To determine the volume of each acid required to react completely with 20.00 mL of 0.100 M NaOH, we need to use the concept of stoichiometry and the balanced chemical equations for the reactions.

a. Reaction between HCl and NaOH:

The balanced equation is:

HCl + NaOH → NaCl + H2O

From the balanced equation, we can see that the stoichiometric ratio between HCl and NaOH is 1:1. This means that 1 mole of HCl reacts with 1 mole of NaOH.

Volume of NaOH solution (V1) = 20.00 mL = 20.00 cm³

Molarity of NaOH (M1) = 0.100 M

Molarity of HCl (M2) = 0.250 M

Using the formula: (M1)(V1) = (M2)(V2)

(0.100 M)(20.00 cm³) = (0.250 M)(V2)

2.000 = 0.250 V2

V2 = 2.000 / 0.250

V2 = 8.00 cm³

Therefore, the volume of 0.250 M HCl required to react completely with 20.00 mL of 0.100 M NaOH is 8.00 mL.

b. Reaction between HNO3 and NaOH:

The balanced equation is:

HNO3 + NaOH → NaNO3 + H2O

Again, from the balanced equation, we see that the stoichiometric ratio between HNO3 and NaOH is 1:1.

Using the same approach as before, we can calculate the volume of 0.250 M HNO3 required:

(0.100 M)(20.00 cm³) = (0.250 M)(V2)

2.000 = 0.250 V2

V2 = 2.000 / 0.250

V2 = 8.00 cm³

Therefore, the volume of 0.250 M HNO3 required to react completely with 20.00 mL of 0.100 M NaOH is 8.00 mL.

c. Reaction between HC2H3O2 and NaOH:

The balanced equation is:

HC2H3O2 + NaOH → NaC2H3O2 + H2O

From the balanced equation, the stoichiometric ratio between HC2H3O2 and NaOH is 1:1.

Using the same method as before:

(0.100 M)(20.00 cm³) = (0.250 M)(V2)

2.000 = 0.250 V2

V2 = 2.000 / 0.250

V2 = 8.00 cm³

Therefore, the volume of 0.250 M HC2H3O2 required to react completely with 20.00 mL of 0.100 M NaOH is 8.00 mL.

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Which of the following is an example of a soft skill?
A. Ability to use CSS spreadsheets
B. Ability to manage spreadsheets
C. Ability to work well with a project team
D. Ability to manipulate images using computer software

Answers

Answer:

Ability to work well with a project team

Explanation:

Jennifer was working with some photo-editing software to crop one of her photos when she noticed that the image looked grainy. What MOST LIKELY happened? O A. She didn't crop enough of the image. O B. She wasn't using photo-editing software. OC. She cropped too much of the image and the resolution was reduced. O D. She cropped too much of the image and the resolution was increased.​

Answers

Answer:

C. She cropped too much of the image and the resolution was reduced.

Explanation:

When a photo is edited via cropping, it is essentially chopping away "unwanted" pixels from the photo. However, the removal of such pixels may affect the image in a negative way, leading to a lower resolution. Remember, the less pixels the image has, the lower the resolution. The higher the pixel amount, the better the resolution.

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Jackie has determined some possible careers that would suit her include being a photographer, a graphic artist, a web designer, or a visual merchandiser. What is the next step Jackie should take in the decision-making process?

Answers

In the decison making process the next step that Jackie would have to take would be Gather information.

What is the decision making process?

This is the terminology that is used to describe the way that people would have to make decisions especially concerning certain things.

In order to make decisions it is very important that a person would first have the adequate knowledge that would guide them in their decision.

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define finance education for class 8

Answers

Financial literacy is the education and understanding of knowing how money is made, spent, and saved, as well as the skills and ability to use financial resources to make decisions. These decisions include how to generate, invest, spend, and save money.

Jasper has been working a lot of overtime during the most current economic expansion. As a result, his income is high enough for him to move from the 12 percent tax bracket to the 22 percent tax bracket. The increased amount Jasper pays to the government is an example of:

Answers

The increased taxes paid to the government by Johnny represent what are known as automatic stabilizers slowing the economy.

What are automatic stabilizers?

These are factors in the economy that stop it from growing too fast that it becomes overheated.

Taxes are one such stabilizer because in making sure that people pay more to the government when they earn more, their spending is reduced which means that the economy doesn't grow too much.

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Question Three (3)
The principle of continuous improvement is common to
many businesses. Continuous improvement is a culture of developing
and improving processes and products over time. Using practic

Answers

Continuous improvement is a culture of developing and improving processes and products over time.

What does continuous improvement involve in businesses?

Continuous improvement is a fundamental concept embraced by many businesses. It entails the ongoing effort to enhance processes and products, aiming for increased efficiency, quality, and customer satisfaction. This approach emphasizes the need for a proactive and systematic approach to identifying areas of improvement, implementing changes, and evaluating their impact.

By fostering a culture of continuous improvement, organizations can adapt to evolving market demands, stay ahead of competitors, and drive innovation. It involves encouraging employees at all levels to contribute ideas, seeking feedback from customers, and leveraging data and analytics to identify opportunities for optimization. Embracing this principle can lead to enhanced productivity, reduced costs, and ultimately, long-term success in a rapidly changing business landscape.

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Scotty's secret project has an initial cash outflow of $39,800 and will produce cash inflows of $18,304, $19,516, and $14,280 for years 1 through 3, respectively. What is the NPV of Scotty's project if the discount rate is 16%? Should Scotty accept the project?

Answers

The NPV of Scotty's project, with a discount rate of 16%, is $982.51.

To calculate the net present value (NPV) of Scotty's project, we need to discount the cash inflows and outflows using the discount rate of 16%.

The formula to calculate the NPV is: NPV = CF0 / (1+r)^0 + CF1 / (1+r)^1 + CF2 / (1+r)^2 + CF3 / (1+r)^3

where CF0 is the initial cash outflow and CF1, CF2, CF3 are the cash inflows in years 1, 2, and 3 respectively, and r is the discount rate.

Given: Initial cash outflow (CF0) = -$39,800, Cash inflow in year 1 (CF1) = $18,304, Cash inflow in year 2 (CF2) = $19,516, Cash inflow in year 3 (CF3) = $14,280, Discount rate (r) = 16%.

NPV = (-$39,800) / (1+0.16)^0 + $18,304 / (1+0.16)^1 + $19,516 / (1+0.16)^2 + $14,280 / (1+0.16)^3

Calculating each term: NPV = (-$39,800) / (1.16)^0 + $18,304 / (1.16)^1 + $19,516 / (1.16)^2 + $14,280 / (1.16)^3

Simplifying: NPV = -$39,800 + $18,304 / 1.16 + $19,516 / (1.16)^2 + $14,280 / (1.16)^3

Calculating further: NPV = -$39,800 + $15,793.10 + $14,608.42 + $9,606.99

NPV = $982.51

The NPV of Scotty's project, with a discount rate of 16%, is $982.51.

To determine whether Scotty should accept the project, we consider the rule that if the NPV is positive, the project is expected to generate more value than the cost of capital and is considered acceptable.

In this case, the NPV is positive, indicating that the project is expected to generate a positive return above the required rate of return (16%). Therefore, Scotty should accept the project.

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Tell me all the important stuff i need to know about scarcity in terms of Economics?

Answers

Answer:

Scarcity refers to the basic economic problem, the gap between limited – that is, scarce – resources and theoretically limitless wants. This situation requires people to make decisions about how to allocate resources efficiently, in order to satisfy basic needs and as many additional wants as possible

Explanation:

Hope this helps! Have a good day!

Answer:

Scarcity refers to the basic economic problem, the gap between limited – that is, scarce resources and theoretically limitless wants. This situation requires people to make decisions about how to allocate resources efficiently, in order to satisfy basic needs and as many additional wants as possible.

Explanation:

Agency problems are most likely to be associated with?

Answers

Agency troubles are most likely to be related with corporations. Agency troubles is the problem of  interest inherent between the interest of two party in a corporation.

What is corporation?

Corporation is the legal structure that creates with the laws and regulation of its state of incorporation. Specific states have the authority to make an effect of the law.

They can create, dismiss, organization and dissolution of any law within the state of corporation. Many states follow  the Model Business Corporation Act.

Thus, Agency troubles are most likely to be related with corporations.

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what is watermill?write it advantages

Answers

A watermill or water mill is a mill that uses hydropower. It is a structure that uses a water wheel or water turbine to drive a mechanical process such as milling, rolling, or hammering.

what is watermill?write it advantages

Explanation:

Water mill is a mill which runs through hydro or water .

it's advantage

it can be used as agricultural produce cutting up material such pulp timber etc

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Store Policies that are open to interpretation by store employees
a) Customer satisfaction
b) Government law
c) Safety
d) Liability of product

Store Policies that are open to interpretation by store employeesa) Customer satisfactionb) Government

Answers

Answer:

a) Customer satisfaction

Explanation:

1. Despite the expense, why might a business choose to mail a catalog?​

Answers

Answer:

Catalogs can promote a business's brand by displaying them in high-traffic areas and distributing them in stores. Customers often have an idea of what they want to buy after looking through a catalog. But, they'll likely find other items they want to buy when they go online or to a brick-and-mortar store to order.

Does the education make a difference in salary for a database administrator??

Answers

Answer:

Yes it surely does

Explanation:

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