Think Break 21 - Think Break#21 Back to the antique tractor...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Think Break #21 Back to the antique tractor: suppose you bought it for $6,000. Your spouse is mad, saying it's a waste of money--you could have bought a mutual fund and made 7% annual return. You both agree that you can sell it for $7,500 in 3 years: but what is your rate of return? Think Break #21 Answer Back to the antique tractor: suppose you bought it for $6,000. Your spouse is mad, saying it's a waste of money. You both agree that you can sell it for $7,500 in 3 years, but what will be the rate of return? r = (FV/PV)1/t 1 = (7,500/6,000)1/3 1 r = 0.077217345 = 7.72% ...
View Full Document

This note was uploaded on 08/08/2008 for the course AAE 320 taught by Professor Mitchell during the Spring '08 term at University of Wisconsin.

Ask a homework question - tutors are online