Solved: Find the expected rate of return on the investment, Finance Basics

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Find the expected rate of return on the investment

Problem:

My investment is expected to pay the following annual cash flows:

0 1 2 3 4 5
600 600 800 1200 1500

Being an investor I think the appropriate interest rate for this investment is 12.5%, what is the net present value of this cash flow stream?

Now if the price of this investment is really 3,200 what is my expected rate of return on this investment?

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Finance Basics: Find the expected rate of return on the investment

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