Damien plans to buy a share at $120 and hold it for five years. During this period, he would receive average annual dividends of $4 a share. He expects to receive S145 at the end of the five-year period when he sells the share. What are the keystrokes used to calculate the rate of return on the investment?

A. N - 5, PV - 120, PMT-4, FV 145

B. N = 5, PV = 120, PMT = 4, FV-145

C. N>5, PV=-145, PMT = -4, FV-120

D. N = 4, PV = -120, PMT-5, FV-145

E. Nr 4, PV-145, PMT = 5, FV-.120

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Baby Doll

10 February, 07:10

Damien plans to buy a share at $120 and hold it for five years. During this period, he would receive average annual dividends of $4 a share. He expects to receive S145 at the end of the five-year period when he sells the share. What are the keystrokes used to calculate the rate of return on the investment?

A. N - 5, PV - 120, PMT-4, FV 145

B. N = 5, PV = 120, PMT = 4, FV-145

C. N>5, PV=-145, PMT = -4, FV-120

D. N = 4, PV = -120, PMT-5, FV-145

E. Nr 4, PV-145, PMT = 5, FV-.120

+1

Answers (1)

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Amaya Navarro · Answer 1

N=5, PV=-120, PMT=4, FV=145

Explanation:

In this question, we use the Rate formula which is shown in the spreadsheet.

The NPER represents the time period.

Given that,

Present value = $120

Assuming figure - Future value or Face value = $145

PMT = 4

NPER = 5

The formula is shown below:

= Rate (NPER; PMT; -PV; FV; type)

The present value come in negative

This is the answer and the same is not given in the options