Homework Answers
Future value=(Present value)*(1+Annual interest rate)^Number of
periods
Given that the future value=2*(Present value)
Monthly interest rate=Annual interest rate/12
2*(Present value)=(Present value)*(1+Annual interest
rate/12)^38
=>2=(1+Annual interest rate/12)^38
=>2^(1/38)=(1+Annual interest rate/12)
=>1.018408093=(1+Annual interest rate/12)
=>1.018408093-1=Annual interest rate/12
=>0.018408093=Annual interest rate/12
=>0.018408093*12=Annual interest rate
=>0.220897116=Annual interest rate =22.09%
Annual interest rate =22.09%
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