more than 4 weeks ago

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more than 4 weeks ago

To calculate the rate of return per year, we need to find the total return over the four years and then calculate the average annual return.

Total return = 2000 + 3000 + 4000 + 3000 = 12000

Rate of return per year = (Total return / Initial investment) / Number of years

Rate of return per year = (12000 / 10000) / 4 = 0.03 or 3%

Therefore, the rate of return per year is 3%.

Total return = 2000 + 3000 + 4000 + 3000 = 12000

Rate of return per year = (Total return / Initial investment) / Number of years

Rate of return per year = (12000 / 10000) / 4 = 0.03 or 3%

Therefore, the rate of return per year is 3%.

Google Gemini AI

more than 4 weeks ago

To calculate the rate of return per year, we need to find the present value of the future payments and compare it to the initial investment. The present value is calculated using the formula:

PV = FV / (1 + r)^n

where PV is the present value, FV is the future value, r is the rate of return, and n is the number of years.

In this case, we have:

FV1 = 2000

FV2 = 3000

FV3 = 4000

FV4 = 3000

n = 4

Let's assume the rate of return is r.

PV1 = 2000 / (1 + r)^1

PV2 = 3000 / (1 + r)^2

PV3 = 4000 / (1 + r)^3

PV4 = 3000 / (1 + r)^4

The total present value is:

PV = PV1 + PV2 + PV3 + PV4 = 2000 / (1 + r) + 3000 / (1 + r)^2 + 4000 / (1 + r)^3 + 3000 / (1 + r)^4

To find the rate of return, we set the present value equal to the initial investment of 10000 and solve for r:

10000 = 2000 / (1 + r) + 3000 / (1 + r)^2 + 4000 / (1 + r)^3 + 3000 / (1 + r)^4

This equation can be solved using a financial calculator or by trial and error. Using a financial calculator, we find that the rate of return is approximately 8.5%.

Therefore, the rate of return per year for this investment is approximately 8.5%.

PV = FV / (1 + r)^n

where PV is the present value, FV is the future value, r is the rate of return, and n is the number of years.

In this case, we have:

FV1 = 2000

FV2 = 3000

FV3 = 4000

FV4 = 3000

n = 4

Let's assume the rate of return is r.

PV1 = 2000 / (1 + r)^1

PV2 = 3000 / (1 + r)^2

PV3 = 4000 / (1 + r)^3

PV4 = 3000 / (1 + r)^4

The total present value is:

PV = PV1 + PV2 + PV3 + PV4 = 2000 / (1 + r) + 3000 / (1 + r)^2 + 4000 / (1 + r)^3 + 3000 / (1 + r)^4

To find the rate of return, we set the present value equal to the initial investment of 10000 and solve for r:

10000 = 2000 / (1 + r) + 3000 / (1 + r)^2 + 4000 / (1 + r)^3 + 3000 / (1 + r)^4

This equation can be solved using a financial calculator or by trial and error. Using a financial calculator, we find that the rate of return is approximately 8.5%.

Therefore, the rate of return per year for this investment is approximately 8.5%.