Maggie deposits $10,000 today and is promised a return of$17,000 in eight years. What is...

Maggie deposits $10,000 today and is promised a return of $17,000 in eight years. What is the implied annual rate of return

Expert Solution

Formula:

Future value= present value(1+r)^n

r= interest rate for the period.
n = number of periods.

17,000 = 10,000*(1+r)^8
r= 6.86%

Implied annual rate of return is 6.86%

jeff jeffy answered 2 years ago

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