A broadband service company borrowed $2 mil­lion for new equipment and repaid the loan in amounts of $200,000 in years 1 and 2 plus a lump-sum amount of $2.2 million at the end of year 3. What was the interest rate on the loan?

What will be an ideal response?


0 = 2,000,000 – 200,000(P/A,i*,2) – 2,200,000(P/F,i*,3)

Solve for i* = 10% per year (spreadsheet)

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