Cranston Industries made an investment of $11,330. In return, the company will receive $23,255 at the...
Cranston Industries made an investment of $11,330. In return, the company will receive $23,255 at the end of year 9. How much interest will the company earn on this investment? Assume the interest is compounded annually.
Homework Answers
ANswer
interest rate =(FV/PV)^(1/n) -1
FV=23255 and PV=11330
n=9 years
interest rate =(23255/11330)^(1/9) -1
=0.0831746629
=8.31746629
=8.32%
the company will earn 8.32% on this investment
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