Answered: Biff deposited $9,000 in a bank…

Biff deposited $9,000 in a bank account, and 10 years later he closed out the account, which is worth $18,000. What is the annual interest rate over the 10 years? a. 6.45% b. 7.18% c. 9.10% d. 10.0%

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 1P

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Capital asset pricing model, also known as CAPM, shows the relationship between the expected return of the investment and the market at risk. This concept is basically used particularly in the case of stocks or shares. It is also used across finance for pricing assets that have higher risk identity and for evaluating the expected returns for the assets given the risk of those assets and also the cost of capital.

Question

Biff deposited $9,000 in a bank account, and
10 years later he closed out the account,
which is worth $18,000. What is the annual
interest rate over the 10 years?
a. 6.45%
b. 7.18%
C. 9.10%
d. 10.0%

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