## Finance

I need some help on some finance questions
1) A stock that sold for $22 at the beginning of the year was selling for$24 at the end of the year. If the stock paid a dividend of $0.50 per share, what is the simple interest rate on an investment in thei stock? the simple interest rate formula is A=P(1+rt) so A=24 P=22 t=1 r=? am I on the right tract? What do you do with the$0.50 per share?

2. A developer needs $80,000 to buy land. He is able to borrow the money at 10% per year compounded quarterly. How much will the interest amount to if he pays off the load in 5 years? compound interest formula is A=P(1+i)^n....do you use this formula? I don't really understand what the question is asking. Thanks.  PhysOrg.com science news on PhysOrg.com >> Hong Kong launches first electric taxis>> Morocco to harness the wind in energy hunt>> Galaxy's Ring of Fire Recognitions: Gold Member Science Advisor Staff Emeritus  Quote by rain I need some help on some finance questions 1) A stock that sold for$22 at the beginning of the year was selling for $24 at the end of the year. If the stock paid a dividend of$0.50 per share, what is the simple interest rate on an investment in thei stock? the simple interest rate formula is A=P(1+rt) so A=24 P=22 t=1 r=? am I on the right tract? What do you do with the $0.50 per share? If the stock was sold for$24 after receiving the dividend of $0.50, so you actually get back$24.50. Use that formula with A= 24.50, not 24 and solve for r.
 2. A developer needs $80,000 to buy land. He is able to borrow the money at 10% per year compounded quarterly. How much will the interest amount to if he pays off the load in 5 years? compound interest formula is A=P(1+i)^n....do you use this formula? I don't really understand what the question is asking. Thanks. Can we assume that he pays the$80,000 principal back at the end of the 5 years? Because if he pays back part of the principal each month, say, the formula becomes a lot more complicated!
Yes, assuming that, as I just said, he has to pay interest on the entire $80,000 for the entire 5 years, you can use A= P(1+i)n. However, because it is "compounded quarterly" you have to figure it in quarters. i= 0.10/4= 0.025, the interest per quarter instead of per year. And, of course, n= 4*5= 20 quarters, not 5 years. Taking P= 80000, find A. That's the entire amount paid- principle and interest. Subtract the$80,000 principle to find how much of it was interest.
You can approximate that, to check your answer, by using simple interest. At 10% interest for 5 years, his interest would amount to 5*10%= 50%. 50% of $80,000 is$40,000. Of course, compounded quarterly, his interest will amount to more than that.

Since this problem doesn't have anything to do with "Calculus and Analysis" and looks to me like homework, I am moving it

 for 1) the rate is 11.36% for 2) the interest is \$51089.32 am i correct?

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