What Is the IRR of an Investment That Costs $77,500

question 343

Multiple Choice

What is the IRR of an investment that costs $77,500 and pays $27,500 a year for four years?

• A) 16%
• B) 18%
• C) 20%
• D) 22%
• E) 24%

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Definitions:

Reserve Ratio

A regulation set by central banks determining the minimum amount of reserves that must be held by a commercial bank, expressed as a percentage of the bank's total deposits.

Money Supply

The complete collection of monetary funds in an economy, including cash, coins, and the balances in checking and savings accounts, at a given moment.

Gold Coins

Coins made primarily or entirely of gold and used historically as currency, and today often collected as investments or keepsakes.

Small Denomination Time Deposits

Fixed-term deposit accounts offered by banks that have a lower minimum deposit requirement and are usually associated with lower interest rates.