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Walt is evaluating an investment real estate venture that will provide the following returns at...

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Accounting

Walt is evaluating an investment real estate venture that will provide the following returns at the end of each of the following years: Year 1, RM5,500; Year 2, RM7,500; Year 3, RM9,500 and Year 4, RM12,500. An investor wants to earn a 12% return compounded annually on her investment.

(a) Determine how much should she pay for this investment. (5 marks)

(b) Determine the amount she should pay if she expects to earn an annual return of 12% compounded monthly.

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