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    Studying yields from two different bond portfolios

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    A $100,000 bond portfolio generates exactly $9,000 per year in income. Another $100,000 portfolio currently yields $7,000 per year in income, but this amount is expected to grow at 4 percent annually. In about how many years will the two portfolios yield equal amounts?

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    Yield in plan 1=$9000 per annum
    Yield in Plan 2= $7000 per annum
    Growth of yield in plan ...

    Solution Summary

    The solution describes the steps to calculate the time period when returns from two different portfolios will be the same.