Question

Damien plans to buy a share at $120 and hold it for five years. During this period, he would receive average annual dividends of $4 a share. He expects to receive S145 at the end of the five-year period when he sells the share. What are the keystrokes used to calculate the rate of return on the investment?

A. N -5, PV -120, PMT-4, FV 145

B. N = 5, PV = 120, PMT = 4, FV-145

C. N>5,PV=-145, PMT =-4, FV-120

D. N = 4, PV =-120, PMT-5, FV-145

E. Nr 4, PV-145, PMT = 5, FV-.120

Answer 1

Answer:

N=5 , PV=-120 , PMT=4 , FV=145

Explanation:

In this question, we use the Rate formula which is shown in the spreadsheet.  

The NPER represents the time period.  

Given that,  

Present value = $120

Assuming figure - Future value or Face value = $145

PMT = 4

NPER = 5

The formula is shown below:  

= Rate(NPER;PMT;-PV;FV;type)  

The present value come in negative

This is the answer and the same is not given in the options