MC Qu. 18 Solving for Rates What annual rate of return is earned on a Samt......

Question

Question

MC Qu. 18 Solving for Rates What annual rate of return is earned on a Samt... Solving for Rates What annual rate of return is

business finance

Answer 1

Answer #1

Ans:

Formula to compute future value of sum invested at a rate of r for n number of years compounded yearly,

FV = PV * (1+r)ⁿ

FV = Future value = $ 12500

PV = Present value = $ 5500

r = rate of interest = ?

n = number of years = 5 to 11 = 7 years

Insert above data in the formula

12500 = 5500 * (1+r)⁷

(1+r)⁷ = 12500/5500

(1+r) = (2.272727)^(1/7)

(1+r) = 1.124438

r = 12.44 %

Answer 2

Similar Homework Help Questions

MC Qu. 15 Solving for Rates What annual rate of return is earned on a $amt......

MC Qu. 15 Solving for Rates What annual rate of return is earned on a $amt... Solving for Rates What annual rate of return is earned on a $3,400 investment when it grows to $7,300 in eighteen years? o o o of
Solving for Rates What annual rate of return is earned on a $5,000 investment made in...

Solving for Rates What annual rate of return is earned on a $5,000 investment made in year 4 when it grows to $11,000 by the end of year 10? A.) 45.45% B.) 14.04% C.) 21.79% D.) 8.20%
Solving for Rates What annual rate of return is earned on a $3,500 investment when it...

Solving for Rates What annual rate of return is earned on a $3,500 investment when it grows to $7,500 in seventeen years?

MC Qu. 19 Solving for Rates What annual rate of return is implied on a Sam......

MC Qu. 19 Solving for Rates What annual rate of return is implied on a Sam... Solving for Rates What annual rate of return is implied on a $2.200 loan taken next year when 55.100 must be repaid in year 11? Multiple Choice Problem 5-54 Loan Balance (LG5-9) Hank purchased a car for $25,000 two years ago using a 4-year loan with an interest rate of 6.0 percent. He has decided that he would sell the car now, if he...
Solving for Rates What annual rate of return is earned on a $2,000 investment when it...

Solving for Rates What annual rate of return is earned on a $2,000 investment when it grows to $4,500 in eleven years? Present Value of an Annuity Due If the present value of an ordinary, 5-year annuity is $6,600 and interest rates are 11 percent, what's the present value of the same annuity due? Dividend Initiation and Stock Value A firm does not pay a dividend. It is expected to pay its first dividend of $0.80 per share in 2...
What annual rate of return is earned on a 5,100 investment made in year 4 when...

What annual rate of return is earned on a 5,100 investment made in year 4 when it grows to $11,300 by the end of year 10?

What annual rate of return is earned on a $4,000 investment made in year 5 when...

What annual rate of return is earned on a $4,000 investment made in year 5 when it grows to $8,200 by the end of year 8? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
What annual rate of return is earned on a $3,300 investment when it grows to $7,100...

What annual rate of return is earned on a $3,300 investment when it grows to $7,100 in twelve years?
What annual rate of return is earned on a $3,400 investment when it grows to $7,300...

What annual rate of return is earned on a $3,400 investment when it grows to $7,300 in eighteen years?

Solving for Rates What annual rate of return is implied on a $2,000 loan taken next...

Solving for Rates What annual rate of return is implied on a $2,000 loan taken next year when $4,500 must be repaid in year 10? Multiple Choice 8.45% 13.89% 9.43% 12.50%