You are considering investing in a security that will pay you $5,000 in 25 years....
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You are considering investing in a security that will pay you $5,000 in 25 years.
a.If the appropriate discount rate is 11 percent, what is the present value of this investment?
b.Assume these investments sell for $2,376 in return for which you receive $5,000 in 25 years. What is the rate of return investors earn on this investment if they buy it for $2,376?
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