Wednesday

November 26, 2014

November 26, 2014

Posted by **Rob** on Thursday, July 3, 2014 at 3:45am.

I applied the model, (fv/pv)^1/t -1

I use n/t if compounding yearly, quaterly, etc. No matter what I've tried I can't produce the interest rate answer shown in the text.

Here's the original problem:

Jose wants to retire in twenty years and he is deposits $200 at the end of each month in a sinking fund. If he wants to accumulate $130,000 in the twenty years period, what interest rate would provide that amount? Ans: 8.79%

I've tried different variations on principal and exponent and I don't see the outcome, 8.79%. How do you find the rate of interest on an annuity or sinking fund problem like this one?

**Answer this Question**

**Related Questions**

Finance - Lance Industries borrowed $130,000. The company plans to set up a ...

math - The management of Gibraltar Brokerage Services anticipates a capital ...

algebra - Find the amount of periodic payment necessary for the deposit to a ...

math - Classify the finacial problem. Assume a 7% interest rate compounded ...

math - Classify the finacial problem. Assume a 7% interest rate compounded ...

finance - Find the amount of periodic payment necessary for the deposit to a ...

Math - The management of Gibraltar Brokerage Services anticipates a capital ...

accounting - A bond sinking fund investment is started on January 5, 2010, by ...

math 140 - You intend to create a college fund for your baby. If you can get an ...

accounting - A bond sinking fund investment is started on January 5, 2010, by ...