Homework Answers
We use the formula:
A=P(1+r/100)^n
where
A=future value
P=present value
r=rate of interest
n=time period.
5400=4800*(1+r/100)^3
(5400/4800)^(1/3)=(1+r/100)
(1+r/100)=1.0400
r=1.0400-1
=4%(Approx).
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