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REY [17]
3 years ago
12

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.)

Business
1 answer:
Zarrin [17]3 years ago
4 0

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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