FIN200 Summer2018 Talal Almohsen 6/29/18 4:37 PM Homework: Quiz 4 Save Score: 0
ID: 2620518 • Letter: F
Question
FIN200 Summer2018 Talal Almohsen 6/29/18 4:37 PM Homework: Quiz 4 Save Score: 0 of 5 pts 3 of 8 (2 complete) Hw Score: 22.22%, 10 of 45 pts 38-6 (static) Question Help * Holding period and annual (investment) returns. Bohenick Classic Automobiles restores and rebuilds old classic cars. The company purchased and restored a classic 1957 Thunderbird convertible 6 years ago for $8,500.00. Today at auction, the car sold for $50,000.00. What are the holding period return and the annual return on this investment? converible 6 years ago for What is the holding period return of the car? 488.23 % (Round to two decimal places.) What is the simple annual return on the car? 81.37 % (Round to two decimal places.) What is the effective annual return (EAR) on the car? % (Round to two decimal places.) Enter your answer in the answer box and then click Check Answer.Explanation / Answer
using Financial calculator PMT 0 N= 6 PV= -8500 FV= 50000 Press CPT and I/Y I/Y= 34.36% 2nd way Effective annual rate= (50000/8500)^1/6 -1 Effective annual rate= 34.36%
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