Business, 03.05.2021 21:10, lulbbyz

An investor purchased a 5-year financial instrument having the following features: The investor receives payments of 1,000 at the end of each year for 5 years. These payments earn interest at an effective rate of 4 percent per year. At the end of the year, this interest is reinvested at the rate of 3 percent per year. Calculate the purchase price to the investor to produce a yield rate of 4 percent.

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An investor purchased a 5-year financial instrument having the following features: The investor rece...