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Unformatted text preview: timating unknown intermediate values—can be applied. For information on how to interpolate a more precise answer
in this example, see the book’s home page at www.aw.com/gitman. CHAPTER 4 Input
PV 1520 FV
N 4 Time Value of Money 165 require either the PV or the FV value to be input as a negative number to calculate an unknown interest or growth rate. That approach is used here.) Using
the inputs shown at the left, you will find the interest or growth rate to be
5.01%, which is consistent with, but more precise than, the value found using
Table A–2. CPT
5.01 Spreadsheet Use The interest or growth rate for the series of cash flows also can
be calculated as shown on the following Excel spreadsheet. Another type of interest-rate problem involves finding the interest rate associated with an annuity, or equal-payment loan.
EXAMPLE Jan Jacobs can borrow $2,000 to be repaid in equal annual end-of-year amounts
of $514.14 for the next 5 years. She wants to find the interest rate on this loan.
Table Use Substitut...
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