Question: PROBLEM 5-3 COMPOUND VALUE SOLVING FOR ANNUAL RATE At what annual rate would the following lump sums have to be invested to reach the future
| PROBLEM 5-3 | |||
| COMPOUND VALUE SOLVING FOR ANNUAL RATE | |||
| At what annual rate would the following lump sums have to be invested to reach the future values shown? a. $500 to grow to $1,948.00 in 12 years b. $300 to grow to $422.10 in 7 years c. $50 to grow to $280.20 in 20 years d. $200 to grow to $497.60 in 5 years | |||
| SOLUTION | |||
| a. $500 to grow to $1,948.00 in 12 years | |||
| Invest | $500.00 | ||
| Future value | $1,948.00 | ||
| Number of years | 12 | ||
| Annual rate | |||
| b. $300 to grow to $422.10 in 7 years | |||
| Invest | $300.00 | ||
| Future value | $422.10 | ||
| Number of years | 7 | ||
| Annual rate | |||
| c. $50 to grow to $280.20 in 20 years | |||
| Invest | $50.00 | ||
| Future value | $280.20 | ||
| Number of years | 20 | ||
| Annual rate | |||
| d. $200 to grow to $497.60 in 5 years | |||
| Invest | $200.00 | ||
| Future value | $497.60 | ||
| Number of years | 5 | ||
| Annual rate | |||
| Requirements: | |||
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