Question

Good guys will pay you $3,800 a year for 10 years in exchange for $31,300 today. what interest rate will you earn on this annuity?

Answer 1

I hope this helps you




in a year $3800



in 10 year 10.3800=38000



38000-31300=6700


in 10 year rate 6700


for a year rate ?




?.10=6700


?=670