Question:
Refer to the situation described in BE 6–2. Assume that the trip will cost $26,600. What interest rate,
compounded annually, must Bill earn to accumulate enough to pay for the trip?
Answer:
FV factor = $26,600 = 1.33
$20,000
Future value of $1: n = 3, i = ? (from Table 1, i = approximately 10%)
Refer to the situation described in BE 6–2. Assume that the trip will cost $26,600. What interest rate,
compounded annually, must Bill earn to accumulate enough to pay for the trip?
Answer:
FV factor = $26,600 = 1.33
$20,000
Future value of $1: n = 3, i = ? (from Table 1, i = approximately 10%)
