Question

The future value of a 9 year $175,000 payment is $2,250,000. The interest rate of return...

The future value of a 9 year $175,000 payment is $2,250,000. The interest rate of return of this payment would then be:

Group of answer choices

17.4%

4.3%

8.7%

None of these

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Homework Answers

Answer #1

We can calculate the desired result in the excel sheet as follows:

Time (nper) = 9

Annual Payments (pmt) = $ 175,000

Present Value (pv) = $ 0

Future Value (fv) = $ 2,250,000

Using RATE function in excel sheet as shown below:

So, the interest rate comes out to be 8.70%. Therefore correct answer is option (c)

Hope I am able to solve your concern. If you are satisfied hit a thumbs up !!

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