Question

Solve for the unknown interest rate in each of the following (Enter rounded answers as directed, but do not use rounded numbers in intermediate calculations. Enter your answer as a percent rounded to 2 decimal places (e.g., 32.16)):

Present Value	Years	Interest Rate	Future Value
$780	7		$1,511
970	8		1,848
21500	19		148,332
76800	22		325,815

Answer 1

Interest Rate = r = (FV/PV)^1/n - 1

Where FV is Future Vale

                PV is Present Value

r is interest rate

                n is years

Putting the values given in the question one by one

1) r = (1511/780)^1/7 – 1

= (1.93717948718)^1/7 – 1

= 1.09906724746 – 1

= 0.09906724746

= 9.91%

2) r = (1848/970)^1/8 – 1

   = (1.90515463918)^1/8 – 1

   = 1.08390514826 – 1

   = 0.08390514826

   = 8.39%

3) r = (148332/21500)^1/19 – 1

   = (6.8991627907)^1/19 – 1

   = 1.10699887254 – 1

   = 0.10699887254

   = 10.70%

4) r = (325815/76800)^1/22 – 1

   = (4.2423828125)^1/22 – 1

   = 1.06789295311 – 1

   = 0.06789295311

   = 6.79%

So the complete table is as below:

Present Value	Years	Interest Rate	Future Value
$780	7	9.91%	$1,511
970	8	8.39%	1,848
21500	19	10.70%	148,332
76800	22	6.79%	325,815