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Tom has $3,000 to invest and would like to buy a $9,000 jet-ski in two years....

Tom has $3,000 to invest and would like to buy a $9,000 jet-ski in two years. If interest rate is compounded monthly, what interest he has to receive monthly to reach his goal? show work please

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Answer #1

Information provided:

Present value= $3,000

Future value= $9,000

Time= 2 years*12= 24 months

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

PV= -3,000

FV= 9,000

N= 24

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

The value obtained is 4.68.

Therefore, the monthly interest rate is 4.68%.

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

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