Your need to repay a loan with a future value of $304,071.00 in 18.5 years. If you can make annual year-end deposits of $11,000 into an account, what annual rate of return would you require to earn enough money to pay the loan in full at the due date?
A) 7.92%
B) 8.73%
C) 4.16%
D) 4.39%
Answer: D
Explanation: D) This is an iterative process (trial and error). Solve using the RATE function in Excel.
MODE = END
INPUT 18.5 ? 0 11,000 -304,071
KEY N I/Y PV PMT FV
CPT 4.39
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