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What is the rate of return on an investment of $124,090 if the company expects to receive $10,000 per year for the next 30 years? A. 5.5 percent B. 4 percent C. 7 percent D. 6 percent

Respuesta :

Answer:

C. 7 percent

Explanation:

The computation of the rate of return on the investment is shown below:

Given that

PV = $124,090

FV = $0

PMT = $10,000

NPER = 30

The formula is shown below:

=RATE(NPER;PMT;-PV;FV;TYPE)

The present value comes in negative

After applying the above formula, the rate of return is 7%

Hence, the rate of return on the investment is 7%

The correct option is c. 7%

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