Ken Francis is offered the possibility of investing $8,280 today; in return, he would receive $20,500 after 8 years. What is the annual rate of interest for this investment? (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round PV factor to 4 decimals.)
Present Value/Future Value= p (PV of a Single Amount)Interest Rate/=%
| Future Value | Present Value *(1+r)^n |
| 20500 | 8280*(1+r)^8 |
| 2.475845411 | (1+r)^8 |
| we get value of r from the future value factors table | |
| Check for 8 (Years) in periods column and the number nearest to 2.4758 in the row where you have located 8. WE can see 2.4760 at 12%. Therefore, annual rate of interest for this investment = 12% | |
Ken Francis is offered the possibility of investing $8,280 today; in return, he would receive $20,500...
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A company is considering investing in a new machine that
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What is the internal rate of return if the company buys this
machine? (PV of $1, FV of $1, PVA of $1, and FVA of $1)
(Use appropriate factor(s) from the tables
provided.)
Amount Invested Present Value Annual Net Cash Flow = Factor Amount Invested Annual Net Cash Flow...