1. A bulk materials hauler purchased a used dump truck for $50,000. The operating cost was $5000 per month, with average revenues of $7500 per month. After 2 years, the truck was sold for $ 11 ,000. The rate of return was closest to (a) 2.6% per month (b) 2.6% per year (c) 3.6% per month (d) 3.6% per year
2. Assume you are told that by investing $100,000 now, you will receive $10,000 per year starting in year 5 and continuing forever. If you accept the offer, the rate of return on the investment is (a) Less than 10% per year (b) 0% per year (c) 10% per year (d) Over 10% per year
Five years ago, an alumnus of a small university donated $50,000 to establish a permanent endowment for scholarships. The first scholarships were awarded I year after the money was donated.
If the amount awarded each year (i .e., the interest) is $4500, the rate of return earned on the fund is closest to (a) 7.5% per year (b) 8.5% per year (c) 9% per year (d) 10% per year
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