Question

In: Finance

You have just deposited $8,500 into an account that promises to pay you an annual interest...

You have just deposited $8,500 into an account that promises to pay you an annual interest rate of 6 percent each year for the next 6 years. You will leave the money invested in the account and 10 years from today, you need to have $19,320 in the account. What annual interest rate must you earn over the last 4 years to accomplish this goal?

Multiple Choice

  • 14.07%

  • 11.37%

  • 10.01%

  • 12.51%

  • 11.55%

Solutions

Expert Solution

Value at the end of Year 6 is 8500*(1+0.06)^6 = 12057.41. Take this Value as Present Value for calculating rate.

jeff jeffy answered 1 year ago
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