A construction company makes annual deposits of $400,000 into an investment for 25 years. If the firm must have $17 million by t
he end of the 25th year, what annual interest rate must the investment earn
1 answer:
Answer:
4.15%
Explanation:
In this question we use the RATE formula that is shown in the attachment below:
Given that,
Present value = $0
Future value or Face value = $17,000,000
PMT = $400,000
NPER = 25 years
The formula is shown below:
= Rate(NPER;PMT;PV;-FV;type)
The future value come in negative
So, after solving this, the annual interest rate is 4.15%
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