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Answer & Explanation 5. Option d is correct (9.59%) Annual ROI is 9.59% 6. Option c is correct (ROI is 1568%) Return on investment on cola share is 1568% 7. Option c is correct (85.7%) Return on investment is 85.7%
8. Option b is correct ($ 1523.22) Monthly payment for mortgage is $ 1523.22. Step-by-step explanation 5. Quarterly ROI = [(Investment after 4 months - Investment value today) / Investment value today] * 100 = [(332.79 - 325) / 325] * 100 = 2.3969% Annual ROI = Quarterly ROI * 4 quarters = 2.3969% *4 = 9.59% Option d is correct (9.59%) 6. Return on investment on cola share = [(Share price today - share price in 1989) / share price in 1989] * 100 = [(49.2 - 2.95) / 2.95] * 100 = 1568% approx Option c is correct (ROI is 1568%) 7. Annual increase (r) = 3.5% Number of years (n) = 18 years Return on investment = (1 + r) ^ n - 1 = (1 + 0.035) ^ 18 - 1 = 85.7% Option c is correct (85.7%) 8. EMI = [P * R * (1 + R) ^ N] / [(1 + R) ^ N - 1] Where. P = Principal or loan amount = $ 350,000 R = Interest rate per month = 3.25% per annum or 0.2708% per month N= Number of monthly installments = 30 years * 12 months = 360 months Monthly payment for mortgage (EMI) = [$ 350,000 * 0.2708% * (1 + 0.002708) ^ 360] / [(1 + 0.002708) ^ 360 - 1] = $ 1523.15 Approximately $ 1523.22 Option b is correct ($ 1523.22) Note: Question 8 answer is slightly different due to rounding off. As question is not mentioning anything about rounding off, i have rounded off my final answer to two decimal places.
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