Answer:
Annual rate of interest is 9%
Explanation:
The annual rate of interest is computed using the excel formula of Rate as:
=Rate(nper,pmt,pv,fv,type)
where
nper is number of years which is 26 years
Pmt is monthly payment which is 0
pv is present value which is -$220,000
fv is future value which is $1,950,000
type is 0
So, putting the values above:
=Rate(26,0,-220000,1950000,0)
=9%
Therefore, the rate of interest is 9%
