Determine the rate of return

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A. Narnia Co. wants to purchase a piece of heavy equipment in ten years for $393,430. The corporation currently has $200,000 to invest for this purpose. Determine the rate of return (assuming annual compounding) required to accumulate sufficient funds to acquire the equipment at the end of the ten year period.

B. Apple Inc. decides to pay a one time bonus of $32,810.70 to its vice president who is expected to retire within the next few years. Apple can invest $30,000 at 1% compounded annually. How many years will it take to have $32,810.70 to pay the bonus.

Reference no: EM133058086

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