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Carla Houston has a $26,900 debt that she wishes to repay 5 years from today; she...

Carla Houston has a $26,900 debt that she wishes to repay 5 years from today; she has $16,703 that she intends to invest for the 5 years. What rate of interest will she need to earn annually in order to accumulate enough to pay the debt?

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Answer #1

Present value factory = 16703/26900 = 0.6209

Find the value in present value factor table in 5th year raw.

Rate of interest = 10%

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