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What’s the interest rate of a seven-year, annual $4,000 annuity with present value of $20,000?
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What’s the interest rate of a seven-year, annual $4,000 annuity with present value of $20,000?

User Danny Kopping
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1 Answer

3 votes

Answer:

The interest rate is : 9.20%

Step-by-step explanation:

PV = PMT * [(1-(1+r)^-n)/r]

Annuity Value = Payment Amount x Present Value of an Annuity (PVOA) factor

$20,000 = $4,000 x [(1-(1+r)^-7)/r]

User Sylwester Gryzio
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