our cousin Jeremy has asked you to bankroll his proposed business painting houses in the summer. He
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Question:
our cousin Jeremy has asked you to bankroll his proposed business painting houses in the summer. He plans to operate the business for 5 years to pay his way through college. He needs $5000 to purchase an old pickup, some ladders, a paint sprayer, and some other equipment. He is promising to pay you $1500 at the end of each summer (for 5 years) in return. Calculate your annual rate of return. Contributed by Paul R. McCright, University of South Florida
Prob | |
Solve the problem using EXCEL functions: | |
Year | Cash Flow |
0 | -$5,000 |
1 | 1500 |
2 | 1500 |
3 | 1500 |
4 | 1500 |
5 | 1500 |
r | 15.24% |
Period | |
0 | |
1 | |
2 | |
3 | |
4 | |
5 | |
6 | |
7 | |
8 | |
9 | |
10 | |
i | |
r | |
I eff | |
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