Homework Answers
We use the formula:
A=P(1+r/100)^n
where
A=future value
P=present value
r=rate of interest
n=time period.
5.08=3.15*(1+r/100)^5
(5.08/3.15)^(1/5)=(1+r/100)
(1+r/100)=1.1003
r=1.1003-1
=10%(Approx).
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