Calculating Interest Rate. Find the interest rate implied by the following combinations of present and future values:
Present Value Years Future Value
$400 11 $684
$183 4 $249
$300 7 $300
Use the following formula for compound interest:
M = P( 1 + i )^n
M is the final amount including the principal.
P is the principal amount.
This solution calculates the interest rate given a present value and future value, along with a term in years, for compound interest.