Question 1183461


Given :  an {{{11}}}% discount rate in discounting amounts for {{{3 }}}years​


To Find : Equivalent  interest rate

Solution:

{{{11}}}% discount rate in discounting amounts

=> {{{P = 100-11 = 89}}}

   {{{A = 100}}}

  {{{n = 3}}}  Years

{{{A = P (1  + R/100)^n}}}

 {{{100 = 89 ( 1 + R/100)^3}}}

 {{{100/89= ( 1 + R/100)^3}}}

{{{1.123595505618= ( 1 + R/100)^3}}}

 {{{ root(3,1.123595505618) = 1 + R/100}}}

{{{1.0396= 1 + R/100}}}

{{{(1.0396-1)100 =R }}}

{{{R = 3.96}}} %


answer: {{{3.96}}} %   interest rate is equivalent to an {{{11}}}% discount rate in discounting amounts for {{{3}}} years​