• A company’s dividend this year is $0.88.

Over the next eight years,

the dividends were $0.91, $0.99, $1.12, $0.95, $1.09, $1.25, $1.42,
and $1.26. Calculate the annually compounded growth rate of the
dividend over the whole period.
• An investment (a bond) will pay $1,500 at the end of each year for 25
years and on the date of the last payment will also make a separate
payment of $40,000. If your required rate of return on this
investment is 4%, how much would you be willing to pay for the bond
today
• If $5,000 is invested in a fund offering a rate of return of 12% per
year, approximately how many years will it take for the investment to
reach $10,000?