Question

Solve for the unknown interest rate in each of the following: (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) Present Value Years Interest Rate 735 ok 925 17,000 72,300 Future Value 1,421 1,758 143,832 316,815 18 ences

Answer 1

The below expression can be used to calculate interest rate:

Present value = Future value (1+i)"

(1+i)" = Future value Present value

(1+i)= Future value Present value

1 = Future value Present value

a.

Interest is calculated below:

71,421}言 =(35) -1

i= 1.1161 – 1

i = 0.1161

Interest is 11.61%.

b.

Interest is calculated below:

1 - 71.758 1925

i= 1.0961 – 1

19600=1

Interest is 9.61%.

c.

Interest is calculated below:

7143. 832) 17,000

i= 1.1260 – 1

i = 0.1260

Interest is 12.60%.

d.

Interest is calculated below:

1 - (316,815) 72, 300

i= 1.0729 – 1

i = 0,0729

Interest is 7.29%.