Question

Annual rate of interest %

nment CALCOLATOR IUL L SCREEN PRINTERVIRSİON 4BACK Question 4 If Colleen Mooney invests $3,402.39 now and she will receive $11,500 at the end of 18 years, what annual rate of interest will Colleen earn on her investment? (Hint Use Present value of 1 factor table.) (Round answer to 0 decimal places, e.g. 25%.) Click here to view the factor table. (For calculation purposes, use 5 decimal places as displayed in the factor table provided.) Annual rate of interest LINK 10 TEXT

Answer 1

Present Value Table
Year	4%	5%	6%	7%	8%	9%	10%
1	0.96154	0.95238	0.94340	0.93458	0.92593	0.91743	0.90909
2	0.92456	0.90703	0.89000	0.87344	0.85734	0.84168	0.82645
3	0.88900	0.86384	0.83962	0.81630	0.79383	0.77218	0.75131
4	0.85480	0.82270	0.79209	0.76290	0.73503	0.70843	0.68301
5	0.82193	0.78353	0.74726	0.71299	0.68058	0.64993	0.62092
6	0.79031	0.74622	0.70496	0.66634	0.63017	0.59627	0.56447
7	0.75992	0.71068	0.66506	0.62275	0.58349	0.54703	0.51316
8	0.73069	0.67684	0.62741	0.58201	0.54027	0.50187	0.46651
9	0.70259	0.64461	0.59190	0.54393	0.50025	0.46043	0.42410
10	0.67556	0.61391	0.55839	0.50835	0.46319	0.42241	0.38554
11	0.64958	0.58468	0.52679	0.47509	0.42888	0.38753	0.35049
12	0.62460	0.55684	0.49697	0.44401	0.39711	0.35553	0.31863
13	0.60057	0.53032	0.46884	0.41496	0.36770	0.32618	0.28966
14	0.57748	0.50507	0.44230	0.38782	0.34046	0.29925	0.26333
15	0.55526	0.48102	0.41727	0.36245	0.31524	0.27454	0.23939
16	0.53391	0.45811	0.39365	0.33873	0.29189	0.25187	0.21763
17	0.51337	0.43630	0.37136	0.31657	0.27027	0.23107	0.19784
18	0.49363	0.41552	0.35034	0.29586	0.25025	0.21199	0.17986

Amount Invested	$    3,402.39
Divided by:Investment Sold	$ 11,500.00
Present Value Factor (for Year = 18)	0.29586
From the above Table (in the horizontal line of Year 18), 0.29586 should be found at a rate of 7%
Annual Rate of Return	7%