Comprehended the effect of investment value compounding

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1a) You have an opportunity to invest $25000 today and receive $35000 in 4 years. What is the expected annual return in percentage terms (or yield)?

b) Regarding your answer in (a), please explain if your answer has comprehended the effect of the investment’s value compounding in value or whether you have used a methodology that ignores compounding. In other words is your answer in (a) above a compound return or not?

c) You invested $25000 in the ordinary shares of a company 4 years’ ago and received $3000 in dividends over those 4 years. The shares today are worth $32000. What is the historical return (also called holding period return) in percentage terms?

Reference no: EM132028729

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