Q2 - Problem solving with arithmetic sequences Ashley plants a tree 45 cm tall.
It grows by 10 cm each year,
As a reward for looking after his tree, Ashley's parents give him the height of the tree in pounds each year.

Find the amount Ashley
gets in the 5th year?

Write down and simplify a formula
for the total amount of money
after n years.

How many years will it take Ashley
to make a total of $525?

required rate of return = 0.166 = 16.6%

step-by-step explanation:

under the capital asset pricing model (capm), the required or expected rate of return for a particular security or asset is given using the formula:

required rate of return = risk-free rate + beta*(market risk premium)

we are given that;

risk-free rate = 4% = 0.04

beta = 1.4

market risk premium = 9% = 0.09

we simply plug these values into the above formula;

required rate of return = 0.04 + 1.4*(0.09)

required rate of return = 0.04 + 0.126

required rate of return = 0.166 = 16.6%