What would be the yield on investment


Response to the following questions:

1. You invest $7000 in shares and receive $65, $70, $70 and $65 in dividends over the following four years. At the end of the four years, you sell the shares for $7900. What was the yield on this investment?

2. Your friend asks you to invest $10 000 in a business venture. Based on your estimates, you would receive nothing for four years, at the end of year 5 you would receive interest on the investment compounded annually at 8%, and at the end of year 6 you would receive $14 500. If your estimates are correct, what would be the yield on this investment?

 

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Financial Accounting: What would be the yield on investment
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