SOLUTION: A person makes annual payments of $1000 into an ordinary annuity. At the end of 5 years, the amount in the annuity $5806.07. What annual nominal compounding rate has this annuity e
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Question 902893: A person makes annual payments of $1000 into an ordinary annuity. At the end of 5 years, the amount in the annuity $5806.07. What annual nominal compounding rate has this annuity earned? Round to the nearest 2 decimal places.
Answer by swincher4391(1107) (Show Source): You can put this solution on YOUR website!
Using a TI BA II Plus:
n = 5, pmt = -1000, pv = 0 , fv = 5806.07, p/y = 1, c/y = 1, compute I/Y and we get 7.48%.
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