Solve the Problem. -Mardi Received an Inheritance of $40,000. She Invested Part at Invested

question 335

Multiple Choice

Solve the problem.
-Mardi received an inheritance of $40,000. She invested part at 1.5% and deposited the remainder in tax-free bonds at 2%. Her total annual income from the investments was $650. Find the amount
Invested at 1.5%.

• A) $39,350
• B) $15,000
• C) $29,000
• D) $30,000

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Definitions:

Internal Rate of Return

A financial metric used to evaluate the profitability of an investment, calculated as the discount rate that makes the net present value of all cash flows equal to zero.

Present Value

The present financial value of a future money amount or stream of cash flows, calculated using a specific rate of return.

Annual Net Cash Flows

The amount of cash a company generates after all its expenditures, both operational and capital in nature, have been paid off within a fiscal year.

Average Rate of Return

A financial metric used to calculate the average annual return on an investment or project over its lifetime.