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. % b. You lend $700 and the borrower promises to pay you $777 at the end of 1 year. % c. You borrow $88,000 and promise to pay back $550,376 at the end of 15 years. % d. You borrow $20,000 and promise to make payments of $6,687.60 at the end of each year for 5 years. %
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. % b. You lend $700 and the borrower promises to pay you $777 at the end of 1 year. % c. You borrow $88,000 and promise to pay back $550,376 at the end of 15 years. % d. You borrow $20,000 and promise to make payments of $6,687.60 at the end of each year for 5 years. %
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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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.
%
b. You lend $700 and the borrower promises to pay you $777 at the end of 1 year.
%
c. You borrow $88,000 and promise to pay back $550,376 at the end of 15 years.
%
d. You borrow $20,000 and promise to make payments of $6,687.60 at the end of each year for 5 years.
%
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As per our guidelines, we are supposed to answer only 3 sub-parts (if there are multiple sub-parts asked).
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Solving a, b, c
Data given:
| Description | Data | |
| a) | PV ($) | 700 |
| FV ($) | 777 | |
| n (year) | 1 | |
| Rate | ? | |
| b) | PV ($) | 700 |
| FV ($) | 777 | |
| n (year) | 1 | |
| Rate | ? | |
| c) | PV ($) | 88000 |
| FV ($) | 550376 | |
| n (year) | 15 | |
| Rate | ? |
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