1. If you borrow $10,000 from your brother today and agree to repay $11,250 in three years' time. What is the interest rate on this loan? Round to the nearest per cent.

2. You are evaluating an investment that will provide an infinite constant growing cash flow. The first return of $15,000 will will occur in one year and then continue to grow at a rate of 3%. If you require a return of 8 per cent, what present value would you place on this investment.

 

 

Answer rating: 100% (QA)

1 To calculate the interest rate on the loan from your brother you can use the formula for ... View the full answer