3. Cecilia Jeffries purchased an investment for $49,090.75. From this investment

Question

3. Cecilia Jeffries purchased an investment for $49,090.75. From this investment, she will receive $5,000 annually for the next 20 years starting one year from now. What rate of interest will Cecilia be earning on her investment? (For calculation purposes, use 5 decimal places as displayed in the factor table provided.)

Rate of Interest= %

2. Sarah Denny purchased an investment for $40,260.48. From this investment, she will receive $6,000 annually for the next 10 years starting one year from now. What rate of interest will Sarah be earning on her investment? (For calculation purposes, use 5 decimal places as displayed in the factor table provided.)


Rate of Interest= %

Explanation / Answer

3) $49090.75 / 5000 = 9.81815 (20 periods at 8%)

Answer 8%

2) $ 40260.48 / 6000 = 6.71008 (10 periods at 8%)

Answer 8%

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