822 for 4 years is the interest or growth rate of

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

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 1250 Function 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 I Solution 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...
View Full Document

This document was uploaded on 03/03/2014 for the course MBA BMMF at Open University Malaysia.

Ask a homework question - tutors are online