Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
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3
Question 2
Solve for the unknown interest rate in each of the following (Do not round intermediate calculations and enter your answers as a
percent rounded to 2 decimal places, eg.. 32.16)
Present Value
Years
Interest Rate
Future Value
181
317
335
17
1.080
48 000
13
185 382
40,353
30
531618
!!!
日
Expert Solution
Step 1
Interest Rate:
It is the rate charged by the lender to the borrower for taking a loan. The interest rate is charged on the principal amount.
Hence interest charged is the rate of return for the lender and cost of capital for the borrower.
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