Question
In: Finance
Find the interest rate implied by the following combinations of present and future values: (Do not...
Find the interest rate implied by the following combinations of present and future values: (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Leave no cells blank - be certain to enter "0" wherever required.)
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Solutions
Expert Solution
| FV = | Future Value | |
| PV = | Present Value | |
| r = | rate of interest | |
| n= | no of period | |
| a) | FV/ PV = | (1 + r )^n |
| 806 / 450 = | (1 + r%)^10 | |
| 1.79111111111 = | (1 + r%)^10 | |
| r = | 6.00% | |
| b) | FV/ PV = | (1 + r )^n |
| 269 / 208 = | (1 + r%)^3 | |
| 1.29326923076= | (1 + r%)^3 | |
| r = | 8.95% | |
| c) | FV/ PV = | (1 + r )^n |
| 350 / 350 = | (1 + r%)^6 | |
| 1 = | (1 + r%)^6 | |
| r = | 0.00% | |
jeff jeffy answered 1 year agoRelated Solutions
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