angela210793
10 years ago A bought a share for 20$ and sold it today for 35$.What is the rate of profit he had from this investment. I thought to use PV=FV*FVIF where PV=35 and PV=20 and then calculate FVIF..is this right?
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angela210793
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hang on a sec
angela210793
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I don't get it O.o :(
angela210793
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Annam terms? what's that?
angela210793
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so its PVA?
sheg
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no
angela210793
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O.o What is it then? O.o
angela210793
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the return today i guess
angela210793
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ok...then what?
angela210793
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:O how's that??? we've never solved a problem in this way O.o :(
I'm gonna fail :(((((
sheg
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oh in this question is discounting rate given ???
angela210793
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no...i wrote it exactly as it is written in my w-book....
angela210793
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is there any way solving this using PV or FV or anything like this?
angela210793
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ok ok
angela210793
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:( ok thanks anyway :)))
sheg
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see the thing which u were saying was including the interest factor right
Future value = Present Value *(1 + K)^n
35 = 20*(1+k)^10
on solving this one u will get
k = 0.0575
Rate of return = 5.75 %
angela210793
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I actually had this solved in my notebook and my teacher had solved this using PV=FV*PVIF
sheg
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Future value = Present Value *(1 + K)^n 35 = 20*(1+k)^10 on solving this one u will get k = 0.0575 Rate of return = 5.75 %
sheg
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first i had taken the layman's approach and in that i was ignoring the discounting factor
sheg
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hey hang on
you have written
PV = FV * PVIF
is that so
angela210793
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yea O.o
sheg
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ok PV = ?? 20 or, 35
angela210793
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PV=20 FV=35 PVIF is wht i have to find...which means i waas right except the fact tht instead of writing PVIF i wrote FVIF
angela210793
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yea yea :) thanks :)
going to eat now :) cya :)
sheg
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^^^^^ see above i had solved that using discounting factor too above