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Answer & Explanation
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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.

If you still have any doubt or query in the question, feel free to comment down in comment section. I will try to resolve it.
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