You purchase a $1,000 asset for $800. It pays $60 a year for seven years at which

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You purchase a $1,000 asset for $800. It pays $60 a year for seven years at which time you receive the $1,000 principal. Prove that the annual return on this investment is not 9 percent.

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Investments An Introduction

ISBN: 978-0324561388

9th Edition

Authors: Herbert B Mayo

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Question Posted: Jun 26, 2012 05:23 AM

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You purchase a $1,000 asset for $800. It pays $60 a year for seven years at which

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At 9 percent the present value of the payments is 605033 10000547 84898 FV 1000 PMT 60 I 9 N 7 PV ...View the full answer

Investments An Introduction

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