If the debt of a loan increases by 37% in 6 years, what is the loan's...
If the debt of a loan increases by 37% in 6 years, what is the loan's equivalent annual rate?
Homework Answers
Ans : Future value = 137 %
Present value = 100%
number of years(n) = 6 years
rate of interest (r) = ?
Future value = Present value * (1+r)n
137 = 100 * (1+r)6
1.37 = (1+r)6
(1+r) = (1.37)1/6
1+r = 1.053869
r = 5.3869 %
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