Answered

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Bob wants to take his wife, Jessica, to Europe in three years to commemorate their 40th wedding anniversary. He recently received a $23,000 inheritance from an uncle, which he plans to put towards the trip. The trip is expected to cost $32,200, according to Bill. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1, FVAD of $1, FVAD of $1, FVAD of $1, FVAD of $1, FVAD of $1, FVAD of $1, FVAD of $1, F (From the tables provided, select the appropriate factor(s).)

What annual compounded interest rate must Bill earn to save enough money to pay for the trip? (Round to the nearest whole percentage your interest rate.)

Sagot :

giannawilson817

Answer:

10%

Explanation:

Use future value formula

Future Value =  Present Value ((1+r)^n)

26,600 =  20,000 ((1+r)^3

26,600/20,000 = (1+r)^3

1.33 = (1+r)^3

1.33^1/3 = 1+r

1.0997 = 1+r

1.0997 - 1 = r

r = 0.997 = 9.97% = 10% (rounded of to the nearest whole percentage)

(pls give brainliest)

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