MC algo 5-43 Calculating Annuity Interest Rates Bob has been investing $4,000 in stock at the...
MC algo 5-43 Calculating Annuity Interest Rates Bob has been investing $4,000 in stock at the end of every year for the past 8 years. If the account is currently worth $45,000, what was his annual return on this investment?
10.61%
10.91%
8.81%
9.55%
9.07%
Homework Answers
We can calculate the return percentage using the RATE formula in Excel as follows:
=RATE(nper,pmt,pv,fv), where,
nper is 8 periods
pmt is annual deposits 4000
fv is 45000
=RATE(8,-4000,0,45000)
=9.55%
The answer is d)9.55%
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