The Oscar Theatre is looking to put on a new musical product

The Oscar Theatre is looking to put on a new musical production, \"Work Hard or Die Trying, Girl.\" In order to have the set designed to their specifications, they\'ll need to begin saving money.

They know they\'ll need $40,000 in 4 years, and they\'re able to invest $8,500 each year.

What interest rate will they need in order to reach their goal?

Solution

FV = 40,000 PV = 0, N = 4, PMT = -8500

use rate funciton in Excel

interest rate required = 10.94%