Question
Asked Jan 16, 2020
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John has an investment opportunity that promises to pay him $16,000 in four years. He could earn a 6% annual return investing his money elsewhere.Suppose the opportunity requires John to invest $13,200 today. What is the interest rate John would earn on this investment?

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Expert Answer

Step 1

Formula used to calculate present value.

Accounting homework question answer, step 1, image 1
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Step 2

Calculate the present val...

Accounting homework question answer, step 2, image 1
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