Question

theory of interests, if you are not familiar with it please don't try. I got a lot of wrong answers so far.thanks explain your reasoning please. thanks

12.0/1 points Previous Answers An annuity due which pays $98 per month for 12 years has a present value of $7,693.00. Calculate the annual effective interest rate used to determine the present value. Answer = 11.52 % (in percents to 2 decimal places.)

Answer 1

11.95%

Step-1:Calculation of nominal annual rate of return
Nominal rate of return	=	=rate(nper,pmt,pv)*12		Where,
	=	11.34%		nper	=	12*12	=	144
				pmt			=	$         98.00
				pv			=	$ -7,693.00
Step-2:Annual effective interest rate
Annual effective interest rate	=	((1+(i/n))^n)-1		Where,
	=	((1+(0.1134/12))^12)-1		i	=	11.34%
	=	11.95%		n	=	12