Question

1. Solve the unknown interest rate.  Do not round intermediate calculations and round your final answer to 2 decimal places.

Present Value	Years	Interest Rate	Future Value
$         240	2		$        297
360	10		1080
39,000	15		185,382
38,261	30		531,618

The interest rate is calculating as per the formula FV = PV*(1+r) ^n

b.Solve the unknown number of years.  Do not round intermediate calculations and round your final answer to 2 decimal places.

Present Value	Years	Interest Rate	Future Value
$       560		9%	$     1,284
810		10	4,341
18,400		15	364,518
21,500		17	173.439

Answer 1

a.1.Information provided:

Present value= $240

Time= 2 years

Future value= $297

The interest rate is calculated by entering the below in a financial calculator:

PV= -240

N=2

FV= 297

Press the CPT key and I/Y to compute the interest rate.

The value obtained is 11.24.

Therefore, the interest rate is 11.24%.

2. Information provided:

Present value= $360

Time= 10 years

Future value= $1,080

The interest rate is calculated by entering the below in a financial calculator:

PV= -360

N=10

FV= 1,080

Press the CPT key and I/Y to compute the interest rate.

The value obtained is 11.61.

Therefore, the interest rate is 11.61%.

3. Information provided:

Present value= $39,000

Time= 15 years

Future value= $185,382

The interest rate is calculated by entering the below in a financial calculator:

PV= -39,000

N=15

FV= 185,382

Press the CPT key and I/Y to compute the interest rate.

The value obtained is 10.95.

Therefore, the interest rate is 10.95%.

4. Information provided:

Present value= $38,261

Time= 30 years

Future value= $531,618

The interest rate is calculated by entering the below in a financial calculator:

PV= -38,261

N=30

FV= 531,618

Press the CPT key and I/Y to compute the interest rate.

The value obtained is 9.17

Therefore, the interest rate is 9.17%.

b. Information provided:

Present value= $560

Future value= $1,284

Interest rate= 9%

The number of years is calculated by entering the below in a financial calculator:

PV= -560

I/Y= 9

FV= 1,284

Press the CPT key and N to compute the interest rate.

The value obtained is 9.63.

Therefore, the interest rate is 9.63 years.

2. Information provided:

Present value= $810

Future value= $4,341

Interest rate= 10%

The number of years is calculated by entering the below in a financial calculator:

PV= -810

I/Y= 10

FV= 4,341

Press the CPT key and N to compute the interest rate.

The value obtained is 17.61.

Therefore, the interest rate is 17.61 years.

3. Information provided:

Present value= $18,400

Future value= $364,518

Interest rate= 15%

The number of years is calculated by entering the below in a financial calculator:

PV= -18,400

I/Y= 15

FV= 364,518

Press the CPT key and N to compute the interest rate.

The value obtained is 21.37.

Therefore, the interest rate is 21.37 years.

4. Information provided:

Present value= $21,500

Future value= $173,439

Interest rate= 17%

The number of years is calculated by entering the below in a financial calculator:

PV= -21,500

I/Y= 17

FV= 173,439

Press the CPT key and N to compute the interest rate.

The value obtained is 13.30

Therefore, the interest rate is 13.30 years.

In case of any query, kindly comment on the solution.