Answer:
a. 7.24%
b. 7.82%
Explanation:
In this question, we use the Rate formula which is shown in the spreadsheet.
The NPER represents the time period.
Given that,
Present value = $756.22
Future value = $1,000
NPER = 4 years
PMT = $0
The formula is shown below:
= Rate(NPER;PMT;-PV;FV;type)
The present value come in negative
So, after solving this, the answer of part A is 7.24%
For Part B
Given that,
Present value = $740
Future value = $1,000
NPER = 4 years
PMT = $0
The formula is shown below:
= Rate(NPER;PMT;-PV;FV;type)
The present value come in negative
So, after solving this, the answer of part A is 7.82%
