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Homework answers / question archive / ? You lend a friend ?$10,000?, for which your friend will repay you ?$27,027 at the end of 5 years
? You lend a friend ?$10,000?, for which your friend will repay you ?$27,027 at the end of 5 years.
What interest rate are you charging your? "friend"?
The interest rate you are charging your friend is ____________________%. (round to the nearest whole percent).
Computation of Interest Rate:
Amount = Principal *(1+Rate)^Time
$27,027 = $10,000*(1+Rate)^5 Years
$27,027 / $10,000 = (1+Rate)^5 Years
2.7027^(1/5) = 1+Rate
1.2199 - 1 = Rate
Rate = 0.2200 or 22.00%
