Finance: HPR,APR,EAR
1. Leslie bought a stock 10 years ago for $500. She just sold it for $800. What is her APR? (Enter your answer as a decimal, i.e. if your answer is 2.5%, enter .025 for your response)
2. Tom just invested $150,000 to open Tom's Bistro, an upscale Italian eatery. The table below shows the annual net profit's of Tom's Bistro. What was Tom's APR for his investment? (Enter your answer as a decimal, i.e. if your answer is 2.5%, enter .025 for your response)
Year 1 - $20,000
Year 2 - $35,000
Year 3 - $50,000
Year 4 - $40,000
Year 5 - $15,000
3. Donna buys three shares of ownership of a local bar. The shares cost $10,000 each. Each year, she and her partners each receive $2,000 of income per share. If Donna can sell her shares for $12,000 after collecting her payment in the 6th year, what was her APR? (Enter your answer as a decimal, i.e. if your answer is 2.5%, enter .025 for your response)
4. Jerry's savings account pays 6% interest compounded monthly. What is his EAR? (Enter your answer as a decimal, i.e. if your answer is 2.5%, enter .025 for your response)
5. Ron lends Andy $100. Andy repays Ron $105 a month later. Which rate of return will most accurately reflect Ron's investment performance
a. HPR
b. APR
c. EAR
d. It doesn't matter, they will all give the same answer.