An annuity due which pays 100 per month for 12 years has a present value of 7,908. Calculate the annual effective interest rate used to determine the present I value. An annuity due which pays 100 per month for 12 years has a present valueof 7,908.Calculate the annual effective interest rate used to determine the presentvalue.

We need to use RATE function in excel to calculate annual effective interest rate.The formula is:…

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An annuity due which pays 100 per month for 12 years has a present value of 7,908. Calculate the annual effective interest rate used to determine the present I value.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 45P

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An annuity due which pays 100 per month for 12 years has a present value of 7,908.

Calculate the annual effective interest rate used to determine the present I value.

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