A $3500 loan was settled ten years later with a payment of $8100. Determine the annual rate of return.
We use the formula:
A=P(1+r/100)^n
where
A=future value
P=present value
r=rate of interest
n=time period.
8100=3500*(1+r/100)^10
(8100/3500)^(1/10)=(1+r/100)
(1+r/100)=1.0875
r=1.0875-1
=8.75%(Approx).
A $3500 loan was settled ten years later with a payment of $8100. Determine the annual...
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