The annual rate of return on an investment that costs $16,278 today and pays $3,000 at the end of each of the next 10 years is: 13%.
We would be making use of financial calculator to find or determine the annual cost by inputting the below data into the calculator.
Number of years=N=10
Present value=PV=-16278, the price of the investment
Face Value=0
Payment per period=PMT=3000
Interest=I=?
Hence:
Rate of return =13%
Therefore the annual rate of return on an investment that costs $16,278 today and pays $3,000 at the end of each of the next 10 years is: 13%.
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