Question

Solve for the unknown interest rate in each of the following: (Do not round intermedia calculations and enter your answers as a percent rounded to 2 decimal places, e. 32.16.) Future Value 1,381 $ Present Value 715 905 15,000 70,300 - 12 % $ $ $ $ 1,718 26 15 % T H MATRAMARIA % $ $ 141,832 312,815

Answer 1

Answer to Question 1:

Case A:

Present Value * (1 + Interest Rate)^Period = Future Value
$715 * (1 + Interest Rate)^9 = $1,381
(1 + Interest Rate)^9 = 1.93147
1 + Interest Rate = 1.0759
Interest Rate = 0.0759 or 7.59%

Case B:

Present Value * (1 + Interest Rate)^Period = Future Value
$905 * (1 + Interest Rate)^12 = $1,718
(1 + Interest Rate)^12 = 1.89834
1 + Interest Rate = 1.0549
Interest Rate = 0.0549 or 5.49%

Case C:

Present Value * (1 + Interest Rate)^Period = Future Value
$15,000 * (1 + Interest Rate)^26 = $141,832
(1 + Interest Rate)^26 = 9.45547
1 + Interest Rate = 1.0903
Interest Rate = 0.0903 or 9.03%

Case D:

Present Value * (1 + Interest Rate)^Period = Future Value
$70,300 * (1 + Interest Rate)^15 = $312,815
(1 + Interest Rate)^15 = 4.44972
1 + Interest Rate = 1.1046
Interest Rate = 0.1046 or 10.46%