Av= 14. What is the interest rate of a 4-year, annual $1.000 annuity with present value...

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Question

business finance

Answer 1

Answer #1

Let interest rate be x%

At this rate;present value of annuity=3500

3500=1000/1.0x+1000/1.0x^2+1000/1.0x^3+1000/1.0x^4

Hence x=interest rate=5.56%(Approx).

Answer 2

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