Nick invests $50 000 today and the fund guarantees an ordinary annuity of $12 345 for six years.What is the approximate rate of return?
A)11.6 percent
B)8)0 percent
C)12.5 percent
D)Insufficient information to calculate

Question

Quizplus · Accepted Answer

The rate of return can be calculated using the present value of an annuity formula. Given the present value ($50,000), the annuity payment ($12,345), and the number of periods (6 years), the approximate rate of return is 12.5 percent.

Nick Invests $50 000 Today and the Fund Guarantees an Ordinary