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Bill Padley expects to invest $10,000 for 25 years, after which he wants to receive $108,347. What rate of interest must Padley earn

Respuesta :

Answer:

10%

Explanation:

r = (FV / PV) ^n -1

r = interest rate

FV = Future value = $108,347

PV = present value = $10,000

n = number of years = 25

($108,347/$10,000)^0.04 - 1 = 0.10 = 10%

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