Find the interest rates earned on each of the following. Round your answers to the nearest whole a. You borrow $700 and promise to pay back $777 at the end of 1 year. 11 % b. You lend $700 and the borrower promises to pay you $777 at the end of 1 year. 11 % c. You borrow $88,000 and promise to pay back $550,376 at the end of 15 years. 13 %

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
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Find the interest rates earned on each of the following. Round your answers to the nearest whole number.
a. You borrow $700 and promise to pay back $777 at the end of 1 year.
11 %
b. You lend $700 and the borrower promises to pay you $777 at the end of 1 year.
11 %
c. You borrow $88,000 and promise to pay back $550,376 at the end of 15 years.
13 %
d. You borrow $20,000 and promise to make payments of $6,687.60 at the end of each year for 5 years.
%
Transcribed Image Text:Find the interest rates earned on each of the following. Round your answers to the nearest whole number. a. You borrow $700 and promise to pay back $777 at the end of 1 year. 11 % b. You lend $700 and the borrower promises to pay you $777 at the end of 1 year. 11 % c. You borrow $88,000 and promise to pay back $550,376 at the end of 15 years. 13 % d. You borrow $20,000 and promise to make payments of $6,687.60 at the end of each year for 5 years. %
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Since there are multiple subparts, we will answer only first three subparts. 

Time value of money concept says that a dollar amount invested today will have more value in future due to amount of interest earned over the period. 

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