What annual rate of return is implied on a $2,500 loan taken next year when $5,375 must be repaid in year 6? (Do not round inter
mediate calculations. Round your answer to 2 decimal places.)
1 answer:
Answer:
16.54%
Explanation:
We have to applied the rate formula that is shown in the attachment.
The NPER shows the time period.
Given that,
Present value = $2,500
Future value or Face value = $5,375
PMT = $0
NPER = 6 years - 1 years = 5 years
The formula is shown below:
= Rate(NPER,PMT,-PV,FV,type)
The present value come in negative
So, after solving this, the annual rate of return is implied is 16.54%
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