youre looking at an intervestment that will pay $1200 in 7 years if you invest $800 today. write out the formula you would use in determining the interest rate for this specific problem.
Future value =present value (1+i)^n
1200 = 800 (1+i)^7
1200/800 = (1+i)^7
1.5 = (1+i)^7
multiplying both sides by ^1/7
(1.5)^1/7 = (1+ i)
1.0596= 1+ i
i = 1.0596 -1
= .0596 or 5.96%
youre looking at an intervestment that will pay $1200 in 7 years if you invest $800...