SOLUTION: You have been offered a loan of $40,000, which you will have to repay in 5 equal annual payments of $10,000, with the first payment to be received one year from now. What interest

Algebra ->  Finance -> SOLUTION: You have been offered a loan of $40,000, which you will have to repay in 5 equal annual payments of $10,000, with the first payment to be received one year from now. What interest      Log On


   

Question 1050166: You have been offered a loan of $40,000, which you will have to repay in 5 equal annual payments of $10,000, with the first payment to be received one year from now. What interest rate would you be paying on the loan?
Answer by Theo(13342) About Me  (Show Source):
You can put this solution on YOUR website!
a financial calculator can solve this for you easily.
one such calculator can be found here:
http://arachnoid.com/finance/index.html

a picture of my inputs is shown below:

$$$

a picture of output is shown below:

$$$

once i hit the ir button, the calculator tells me what the interest rate is.

your solution is that the interest rate is equal to 7.93% rounded to 2 decimal digits.