An Investment Today of $25,000 Promises to Return $10,000 Annually

question 60

Multiple Choice

An investment today of $25,000 promises to return $10,000 annually for the next three years.What is the approximate real rate of return on this investment if inflation averages 6 percent annually during the period?

• A)3.5 percent
• B)9.7 percent
• C)14.0 percent
• D)20.0 percent Solving with financial calculator, the IRR = 9.701%.

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Definitions:

Lungs

Organs in the respiratory system responsible for gas exchange, taking in oxygen and expelling carbon dioxide from the bloodstream.

Digestive System

A complex series of organs and glands responsible for the digestion and absorption of nutrients, and the expulsion of waste.

Cystic Fibrosis

A genetic disorder affecting the lungs and digestive system, characterized by thick, sticky mucus production.

Thick Mucus

A denser form of mucus, which can signify infection or disease, making it harder to expel from the body.