Posted by **Antoinette** on Sunday, March 18, 2007 at 11:45pm.

Calculating Interest Rate. Find the interest rate implied by the following combinations of present and future values.

PresentValue Years Future Value

$400 11 $684

$183 4 $249

$300 7 $300

Since you do not state otherwise, I am assuming that your interest rate is compounded annually.

I will do the second of your questions.

Using Amount = Present Value(1+i)^n

we do not know i.

249=183(1+i)^4

1.3606557=(1+i)^4

take the fourth root

1.0800331=1+i

giving you i=0.0080031

so the annual rate is 8%

by observation the rate for you last question is clearly 0%

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