Algoe expects to invest 2800 annually for 15 years to yield

Algoe expects to invest $2,800 annually for 15 years to yield an accumulated value of $76,025.88 on the date of the last investment. For this to occur, what rate of interest must Algoe earn? (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round \"Table Factor\" to 4 decimal places.) Annuity Future Value Table Factor Interest Rate

Solution

Annual Payment = $2,800
Future Value = $76,025.88
Period = 15 years

Table Factor = Future Value / Annual Payment
Table Factor = $76,025.88 / $2,800
Table Factor = 27.1521

Using FVA of $1 table values, i = 8.00%

So, Algoe must earn a rate of return of 8.00%