I Sign a Contract That Guarantees Me an Immediate Payment

question 32

Multiple Choice

I sign a contract that guarantees me an immediate payment of $2 000, but then I have to invest $800 a year for ten years. At the end of the tenth year I get a further payment of $8 000. What is my internal rate of return on the contract?

• A)There are two solutions: 8% and 16%.
• B)There are two solutions: 13% and 25%.
• C)There are two solutions, 15% and 30%.
• D)There are two solutions: 18% and 24%.
• E)There is a single solution: about 22%.

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Definitions:

Age

The length of time that an individual has lived or a thing has existed.

Wernicke's Area

A region of the brain that is important for language development and comprehension.

Language

A system of communication using sounds or symbols that enables us to express our feelings, thoughts, ideas, and experiences.

Expression

The process of conveying thoughts, feelings, or intentions through words, body language, or artistic mediums.