The second provides a yield of 55 annually compounded


1. What annual rate of return is earned on a $1,000 investment when it grows to $2,200 in seven years?

2. You have two opportunities to invest $8,000 for 7 years. The first provides a yield of 5% annually, compounded monthly. The second provides a yield of 5.5% annually, compounded annually. Which investment provides the highest returns? Be sure to document your conclusion with evidence.

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Financial Management: The second provides a yield of 55 annually compounded
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