Question

Calculate interest rate. ou borrow $67,000 and promise to pay back $148,116 at the end of 7 years. 11 % You borrow $15,000 and promise to make payments of $4,058.60 at the end of each year for 5 years. 20 %

Answer 1

- Q-1)

Present Value of amount Borrowed = $67,000

Future Value to pay in 7 years = $148,116

Calculating the Interest rate using Excel" rate" function:-

So, Interest rate is 12%

Q-2)

Present Value of amount Borrowed = $15,000

Periodic Payment at the end of each year for 7 years = $4058.60

Calculating the Interest rate using Excel" rate" function:-

So, Interest rate is 11%

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