Recurring or cumulative type of Investment . Return= $ 120,000.
P (principal) = $ 78,000.00 I (interest) = $ 42,000.
Interest rate is 11.37 per cent
Explanation:
Total Investment = $13,000 × 6 = 78,000
Total Return value = $30,000 × 4 = 120,000
net return from the investment = 120,000 - 78,000 = 42000
Rate of interest =
Return= $ 120,000.51
Interest rate is 11.37 per cent ( annuity method or compound interest)
A = P + I where
P (principal) = $ 78,000.00
I (interest) = $ 42,000.51
Recurring or cumulative type of Investment .