You're trying to choose between two different investments, both of which have up-front costs of $86,000. investment g returns $151,000 in 7 years. investment h returns $271,000 in 14 years. calculate the rate of return for each these investments.

The Rate of return earned by Investment G is 8.37%, while the rate of return earned by investment H is 8.54%.

We have

                                   Investment G           Investment H

Future Value of returns         151000                         271000

No. of years                               7                              14

Costs                                 86000                           86000

Rate of Return Formula :

Substituting we get ,            

Investment G

RoR = 8.37%

Investment H

RoR = 8.54%

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