Solving for Rates What annual rate of return is implied on a $2,000 loan taken next...

Question

Question

Solving for Rates What annual rate of return is implied on a $2,000 loan taken next year when $4,500 must be repaid in year 10?

Multiple Choice 8.45% 13.89% 9.43% 12.50%

Answer 1

Answer #1

Number of periods = 10 - 1 = 9

Annual rate = (Future value / present value)^1/n - 1

Annual rate = (4500 / 2000)^1/9 - 1

Annual rate = (2.25)^1/9 - 1

Annual rate = 1.0943 - 1

Annual rate = 0.0943 or 9.43%

Add a comment

Answer 2

Similar Homework Help Questions

MC Qu. 19 Solving for Rates What annual rate of return is implied on a Sam......

MC Qu. 19 Solving for Rates What annual rate of return is implied on a Sam... Solving for Rates What annual rate of return is implied on a $2.200 loan taken next year when 55.100 must be repaid in year 11? Multiple Choice Problem 5-54 Loan Balance (LG5-9) Hank purchased a car for $25,000 two years ago using a 4-year loan with an interest rate of 6.0 percent. He has decided that he would sell the car now, if he...
What annual rate of return is implied on a $2,500 loan taken next year when $3,625...

What annual rate of return is implied on a $2,500 loan taken next year when $3,625 must be repaid in year 4? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Find Annual rate of return %
What annual rate of return is implied on a $2,500 loan taken next year when $4,625...

What annual rate of return is implied on a $2,500 loan taken next year when $4,625 must be repaid in year 5? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Solving for Rates What annual rate of return is earned on a $2,000 investment when it...

Solving for Rates What annual rate of return is earned on a $2,000 investment when it grows to $4,500 in eleven years? Present Value of an Annuity Due If the present value of an ordinary, 5-year annuity is $6,600 and interest rates are 11 percent, what's the present value of the same annuity due? Dividend Initiation and Stock Value A firm does not pay a dividend. It is expected to pay its first dividend of $0.80 per share in 2...
MC Qu. 18 Solving for Rates What annual rate of return is earned on a Samt......

MC Qu. 18 Solving for Rates What annual rate of return is earned on a Samt... Solving for Rates What annual rate of return is earned on a $5,500 investment made in year 5 when it grows to $12,500 by the end of year 11?
Solving for Rates What annual rate of return is earned on a $5,000 investment made in...

Solving for Rates What annual rate of return is earned on a $5,000 investment made in year 4 when it grows to $11,000 by the end of year 10? A.) 45.45% B.) 14.04% C.) 21.79% D.) 8.20%

MC Qu. 15 Solving for Rates What annual rate of return is earned on a $amt......

MC Qu. 15 Solving for Rates What annual rate of return is earned on a $amt... Solving for Rates What annual rate of return is earned on a $3,400 investment when it grows to $7,300 in eighteen years? o o o of
Solving for Rates What annual rate of return is earned on a $3,500 investment when it...

Solving for Rates What annual rate of return is earned on a $3,500 investment when it grows to $7,500 in seventeen years?
Problem 4-35 Solving for Rates (LG4-7) 25 You invested $2,000 in the stock market one year...

Problem 4-35 Solving for Rates (LG4-7) 25 You invested $2,000 in the stock market one year ago. Today, the investment is valued at $1700 points What return did you earn? (Negative answer should be indicated by a minus sign) Bock Retur eamed Berences What return would you need to get next year to break even overall? (Do not round Intermediate calculations. Round your answer to 2 decimal places.) Retum eamed LMR my Problem 4-32 Solving for Time (LG4-8) 2.5 points...

can you please show me the equation i need to use for this? Solving for Rates...

can you please show me the equation i need to use for this? Solving for Rates What annual rate of return is earned on a $3,200 investment when it grows to $6,900 in eleven years? Multiple Choice O 1.16% 1.16% 0 2.16% 2.16% 7.23% 0 6.61%