SOLUTION: Can someone please help me with this problem: An investment that cost $48,000 provided annual cash inflows of $9,000 per year for six years. The desired rate of retun is 10%. Th

Question 174489: Can someone please help me with this problem:
An investment that cost $48,000 provided annual cash inflows of $9,000 per year for six years. The desired rate of retun is 10%. The actual return from the investment was:
a. less than the desired rate of return.
b. equal to the desired rate of return.
c. greater than the desired rate of return.
d. the answer cannot be determined from the information provided.
Answer by rapaljer(4671) (Show Source): You can put this solution on YOUR website!
According to the simple interest formula I= Prt, in this problem, the Interest is the inflow which is $9000 PER YEAR, which means that the Time is 1 year, and the principle is $48000

I = Prt
9000= 48000*r*1

Divide boths sides by 48000 (got a calculator??):

%, which is greater than the desired rate of return!! Pretty good investment, considering my bank pays less than 1% on savings accounts!!

R^2
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