Problem 5-34 Annuity Interest Rate (LG5-8) What's the interest rate of a 10-year, annual $3,200 annuity...

Question

Question

Problem 5-34 Annuity Interest Rate (LG5-8) Whats the interest rate of a 10-year, annual $3,200 annuity with present value of

business finance

Answer 1

Answer #1

The interest rate is computed as shown below:

Simply plug the below figures in the financial calculator as follows:

PV = - 20,000

FV = 0

N = 10

PMT = 3,200

Then press CPT and then I/Y, it will give interest rate equal to

= 9.61% Approximately

Feel free to ask in case of any query relating to this question

Answer 2

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