Solve for the unknown interest rate in each of the following (Do not round inter

Question

Solve for the unknown interest rate in each of the following (Do not round intermediate calculations and round your final answers to 2 decimal places. (e.g., 32.16)):

Present Value        Years    Interest Rate          Future Value
$ 180                      5                %                       $ 228
300                       19                                         859
33,000                  20                                       152,407
32,261                  30                                         644,965

Explanation / Answer

FV = PV * (1+r)n

1. 228 = 180 * (1+r)5

1+ r = 1.266671/5

r = 1.0484 - 1 = 4.84%

2. 859 = 300 * (1+r)19

1+ r = 2.86331/19

r = 1.0569 - 1 = 5.69%

3. 152,407 = 33,000 * (1+r)20

1+ r = 4.61841/20

r = 1.0795 - 1 = 7.95%

4. 644,965 = 32,261 * (1+r)30

1+ r = 19.99211/30

r = 1.10499 - 1 = 10.5%

1

1. 228 = 180 * (1+r)5

1+ r = 1.266671/5

r = 1.0484 - 1 = 4.84%. 228 = 180 * (1+r)5

1+ r = 1.266671/5

r = 1.0484 - 1 = 4.84%

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.