Chance to buy promissory note

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1. You have the chance to buy a promissory note in which you will receive 36 monthly payments of $750 (starting a month from now), followed by 12 monthly payments of $850. What is your yield if you buy the note for $35,000?

a. 2.95% compounded monthly

b. 3.15% compounded monthly

c. 4.66% compounded monthly

d. 0.13% compounded monthly

2. Assume the average market return over the next 50 years is expected to be 7.7%. If an investor contributes $19 thousand into an investment account today, pays 2% of assets under management for various fund and advisor fees, and waits for 50 years, what percentage of his final wealth has he sacrificed in fees?

Enter answer in percents.

Reference no: EM132054601

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