1) You have a $6000 dollar balance on your credit card and want to pay it off. The credit card company charges 11% interest.
a) How long will it take to pay off the $6000 debt if you pay $100 each month?
b) How much interest will you pay?
c) If you increased your payment to $175 per month how many payments would you have to
make?
d) With the increased payment, how much interest would you have payed to pay the debt?
e) How much money would you save by increasing the payment from $100 to $175?

required rate of return = 0.166 = 16.6%

step-by-step explanation:

under the capital asset pricing model (capm), the required or expected rate of return for a particular security or asset is given using the formula:

required rate of return = risk-free rate + beta*(market risk premium)

we are given that;

risk-free rate = 4% = 0.04

beta = 1.4

market risk premium = 9% = 0.09

we simply plug these values into the above formula;

required rate of return = 0.04 + 1.4*(0.09)

required rate of return = 0.04 + 0.126

required rate of return = 0.166 = 16.6%