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John has an investment opportunity that promises to pay him $14,104 in four years. Suppose the opportunity requires John to invest $10,760 today.

(FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)

What is the interest rate John would earn on this investment? (Round your interest rate to the nearest whole percentage.)

Solve for i Present Value: n = i = Future Value:

Please show me the work, thank you!

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Answer #1
Solve for i
Present value $         10,760
n =
I = 7%
Future Value $         14,104
Working note for i:
Annuity factor = $14104/10760
1.3108
Check fourth year interest column and find the which interest rate
has FV table =1.3108
it will be our answer
its 7%
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