Daniel Conover borrowed $2,800 from his father to purchase a mountain bike. Daniel paid back $3,800...
Daniel Conover borrowed $2,800 from his father to purchase a mountain bike. Daniel paid back $3,800 to his father at the end of 5 years. What was the average annual compound rate of interest on Daniel’s loan from his father?
Identify:
N
I/Y
PV
PMT
FV
Homework Answers
| Step 1 | Enter | 5 |
| Step 2 | Press | N |
| Step 3 | Enter | 2800 |
| Step 4 | Press | PV |
| Step 5 | Enter | -3800 |
| Step 6 | Press | FV |
| Step 7 | Enter | 0 |
| Step 8 | Press | PMT |
| Step 9 | Press | CPT |
| Step 10 | Press | I/Y |
| Rate of interest | 6.30% | |
Hence, average annual compound rate of interest on Daniel’s loan from his father is 6.30%
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