The nominal rate of return on this investment is 4.5%.
What is the nominal rate of return?
In order to determine the nominal rate of return, the internal rate of return would be calculated. Internal rate of return is the discount rate that equates the after-tax cash flows from an investment to the amount invested.
IRR can be calculated with a financial calculator
Cash flow in year 0 = $-12,000
Cash flow in year 1 - 6 = 0
Cash flow in year 7 = $16,372.
IRR = 4.5%
To learn more about IRR, please check: https://brainly.com/question/26484024
