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Effective annual interest rate

40. If it were evaluated with an interest rate of 0%, a 10 year regular annunity would have a present value of $3755.50. If the future (compounded) value of this annuity, evaluated a year 10, is $5,440.22, what effective annual interest rate must the analyst be using to find the future value

1. 7%
2. 8%
3. 9%
4. 10%
5. 11%

Solution Summary

This explains the computation of effective annual interest rate

$2.19