What interest rate is the bank advertising

Reference no: EM13267716

A local bank is running the following advertisment in the newspaper: "For just $5,000 we will pay you $300 forever!" The Fine print in the ad says that for a $5000 deposit, the bank will pay $100 every year in perpetuity, starting one year after the deposit is made. What interest rate is the bank advertising (what is the rate of return of this investment?)

Reference no: EM13267716

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