Interest rate on savings accounts-compounded annually

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Reference no: EM131554153

1. Your bank offers a 4% interest rate on savings accounts, compounded annually. If you deposit $2,000 into a savings account today, how much will it be worth at the end of One year?

2. You own a security that pays a $50 dividend per year forever (no growth in its cash flow to you). You paid $500 for this security. What annual rate of return do you earn?

Reference no: EM131554153

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