sydneyree3100 sydneyree3100
  • 27-01-2020
  • Business
contestada

What’s the interest rate of a seven-year, annual $4,000 annuity with present value of $20,000?

Respuesta :

waidigbenro waidigbenro
  • 29-01-2020

Answer:

The interest rate is : 9.20%

Explanation:

PV = PMT * [(1-(1+r)^-n)/r]

Annuity Value = Payment Amount x Present Value of an Annuity (PVOA) factor

$20,000 = $4,000 x  [(1-(1+r)^-7)/r]

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