You can invest £3,000 today and will receive £9,000 in ten years. You would be earning...

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You can invest £3,000 today and will receive £9,000 in ten years. You would be earning...

You can invest £3,000 today and will receive £9,000 in ten years. You would be earning what annual rate of interest if compound interest is paid yearly?

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Answer 1

Answer #1

Information provided:

Present value= $3,000

Future value= $9,000

Time= 10 years

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

PV= -3,000

FV= 9,000

N= 10

Press the CPT key and I/Y to compute the annual rate of interest.

The value obtained is 11.6123.

Therefore, the annual rate of interest is 11.61%.

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

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Answer 2

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