Question

X M FINA 360 1: This week X Chapter 5 with Answex Assignment 2 хм мн ewconnect.mheducation.com/flow/connect.html ment 2 A Saved Solve for the unknown interest rate in each of the following (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.); Interest Rate % Present Value 270 390 42,000 41,261 Years 4 18 19 25 Future Value $ 338 1.231 210,390 613,284 Book Hint Print ferences < Prex 4 of 10 Next

Answer 1

F.v = P.v(1+r)^n

R is rate of interest

n is no of years

Case 1

F.v is 338 p.v is 270 n is 4 r= ?

338= 270(1+r)^4 = 1+r= (338/270)^1/4

1+r = 1.06 so r is 6%

Case 2 f.v is1231 p.v is 390 n is 18

1231=390(1+r)^18

1+r=1.065 so r is 6.5%

Case 3

F.v is 210390 p.v is 42000 n is 19

210390=42000(1+r)^19

1+r =1.0855

R is 8.5%

Case 4

F.v =613284

P.v is 41261 n is 25

613284=41261(1+r)^25

1+r= 1.1139

So r is 11.39%