You can invest £3,000 today and will receive £9,000 in ten years. You would be earning what annual rate of interest if compound interest is paid yearly?
Information provided:
Present value= $3,000
Future value= $9,000
Time= 10 years
The annual rate of interest is calculated by entering the below in a financial calculator:
PV= -3,000
FV= 9,000
N= 10
Press the CPT key and I/Y to compute the annual rate of interest.
The value obtained is 11.6123.
Therefore, the annual rate of interest is 11.61%.
In case of any query, kindly comment on the solution.
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