Effective rate of interest Find the interest rates earned on each of the following. Round each answer to two decimal places. You borrow $700 and promise to pay back $735 at the end of 1 year. % You lend $700 and the borrower promises to pay you $735 at the end of 1 year. % You borrow $78,000 and promise to pay back $196,418 at the end of 12 years. % You borrow $9,000 and promise to make payments of $2,684.80 at the end of each year for 5 years.

    a. The effectual profit admonish is :

    PV = $700, gone you borrow $700

    FV = ($735), gone you steadfast object the unite of money

    N= 1 YEAR

    PMT = 0

    I/Y = 5

    b. PV = ($700), Gone you are lending the unite of money

    FV= $735 , gone you are getting paid object this unite.

    N =1 YEAR

    PMT = 0

    COMPUTE I/Y

    I/Y = 5%

    Therefore, the effectual profit admonish is 5%.

    c. PV = $78,000

    FV = ($196,418)

    N= 12 YEARS

    PMT = 0

    COMPUT I/Y

    I/Y = 8%

    d. PV = $9000

    FV = 0

    N = 5 YEARS

    PMT = ($2,684.8), Gone you promised to steadfast a true unite of money at the object of full year.

    COMPUTE I/Y

    I/Y = 14.99%