Show, using Shorthand Economic Form, how you would calculate an equivalent uniform annual amount for cash flows of 800, 200 and 700 in years 1-3 respectively with an annual interest rate, compounded annually, of 8% for year 0-1, 10% for year 1-2 and 6% for year 2-3.
Misty needs to have ?$12,000 at the end of 4 years to fulfill her goal of purchasing a small sailboat. She is willing to invest a lump sum today and leave the money untouched for 4 years until it grows to ?$12,000?, but she wonders what sort of investment return she will need to earn to reach her goal. Use your calculator or spreadsheet to figure out the annually compounded rate of return needed if she can invest ?$8,200 today.
The annually compounded rate of return Misty needs to earn to reach her goal is [ ? ]. (Round to two decimal? places.)