Engineering Board Exam Reviewer · Rate of Return Analysis · medium
An investment of P80,000 pays nothing in year 1 and P50,000 at the end of each of years 2 and 3. Find the rate of return.
- 9.38%
- 25%
- 30%
- 12.5%
Answer
A. 9.38%
Solution
Set 80,000= 50,000(1+i)2+ 50,000(1+i)3. Solving by trial gives i 9.38%.
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