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%

## Answer This Question

## Related Questions

- Finance - Find the future value of $10,000 invested now after five years if the ...
- efe - find the formula for calculating compound interest. If Mr. John Chrystal ...
- programming - Having troube with java, i am not a regular programmer, if anybody...
- finance - Use the following scenario to answer Discussion Question 2. Jean will ...
- Finance - Jean will receive $8,500 per year for the next 15 years from her trust...
- personal finance - calculating future value of retirement account in which you ...
- Fins nance business - 1. Find the future value of current $1,000 5 year from now...
- Personal Finance - NEED HELP IMMEDIATELY, HAVE UNTIL 10P.M. CENTRAL TO HAVE ...
- finance management - what is the future value of a 5 yr. ordinary annuity due ...
- college math - Find the approximate (with an integral estimate) present and ...

More Related Questions