Question

Problem 9-32 Yield [LO4] Franklin Templeton has just invested $9,260 for his son (age one). This money will be used for his son’s education 18 years from now. He calculates that he will need $71,231 by the time the boy goes to school. What rate of return will Mr. Templeton need in order to achieve this goal? Use Appendix B for an approximate answer, but calculate your final answer using the formula  and  financial calculator methods. (Do not round intermediate calculations. Round your final answer to 2 decimal places.)
All input values are shown in yellow. Only these values need changed to review algo versions.
Connect tolerances are listed below the solution.
Assumptions and other problem notes are displayed at the very bottom.
Input variables:
Number of years	18
Future value	$71,231
Solution and Explanation:
Interest rate
PVIF factor

Answer 1

Cal:

The exact rate is calculated using the RATE excel function: =RATE(nper,pmt,pv,fv)

Or by using formula and table, one can find the RATE by dividing the present value by future value and looking up the PVIF in the table.