Thiago W.

asked • 07/20/21

Algebra question about investment (related to economics and percentage)

I have this school activity, I did do it, but my answers did not match! I would really really appreciate it if you could help me by explaining and giving me the answer. God bless you!

John, a beginner in investments was in doubt between 2 assets to invest.


  1. The first would be a fund that offered security and reasonable volatility. This would expire after 6 years, paying 8% per year.
  2. The second was an investment with greater risk but a greater expectation of return. It was a real estate fund that had been performing well in recent months.

John opted for the 2nd option and invested U$10,000.00 in this fund, acquiring 100 shares for U$100.00 each. After a year, the quotas devalued significantly and reached U$90 each.


He then decided to sell his shares and invest in a fixed-rate fund that expires in 5 years, giving up liquidity. Given this situation, what should be, approximately, the annual rate of this fund for the future value to be equaled to the first option?


a) 13%

b) 12,5%

c) 12%

d) 11,5%.

1 Expert Answer

By:

Thiago W.

Thank you so so much!
Report

07/20/21

Samantha W.

tutor
No problem! :)
Report

07/20/21

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