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Calculating the interest rates in the given case

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Warren has $2000 today. Using the Time Value of Money equations, not Excel functions, do the following using compound interest:

a. Determine the interest rate for Warren if $2,500 is returned one year later.
b. Determine the rate if $2,500 will be returned in 5 years?

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Solution depicts the steps to calculate the interest rates in the given case. Calculations are carried out with the help of suitable formulas.

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a. Determine the interest rate for Warren if $2,500 is returned one year later.
Present value of investment=PV=$2000
Future Value of ...

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  • BEng (Hons) , Birla Institute of Technology and Science, India
  • MSc (Hons) , Birla Institute of Technology and Science, India
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