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If you save $2,000 per month for the next 6 years, you would be accumulating $200,000....

If you save $2,000 per month for the next 6 years, you would be accumulating $200,000. What is the implicit annual percentage rate?

Solutions

Expert Solution

Perioidc Monthly Payment at the end of the month = $2000

Future Accumulated amount = $200,000

No of monthly paymnets = 6 years*12

= 72

Calculating the Monthly Interest Rate earned on periodic monthly payment using EXCEL RATE Function:-

Monthly Interest rate = 0.8824%

Annual Interest rate = 0.8824%*12

= 10.5888%

So, the implicit annual percentage rate is 10.5888%

jeff jeffy answered 2 years ago
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