Question

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 % Future Value $ 228 Present Value 180 Milit 3 00 33,000 32,261 Years 5 19 20 ALL 859 152,407 644,965 < Prey 18 of 25 Next >

Answer 1

To calculate interest rate, we use RATE function in excel

=RATE ( nper, pmt, pv, [FV], [type] )

nper: total number of payments period
pmt: amount paid each period

pv: Present Value, as present value is a cash outflow we use – sign.

fv: future value of the amount invested
type: [optional] When the payment is end of period, by default option is 0. In case the payment is at the start of the period enter 1. In our case the payment is assumed at the end of the period.

D 19 B 5 O -180 $228 A 1 Years (nper) 2 Pmt 3 Present Value 4 Future Value 5 6 Intrest Rate 7 0 20 0 -33000 $1,52,407 Ε 30 0 -32261 $6,44,965 -300 $859 4.84% 5.69% 7.95% 10.50% =RATE(B1,B2,B3,B4 =RATE(C1,C2,C3,C4 =RATE(D1, D2,D3,D4 =RATE(E1, E2, E3, E4)