9 Implied interest rate and period Consider the case of the

Last updated: 6/11/2023

9 Implied interest rate and period Consider the case of the following annuities and the need to compute either their expected rate of return or duration Matthew needed money for some unexpected expenses so he borrowed 3 900 55 from a friend and agreed to repay the loan in four equal installments of 1 100 at the end of each year The agreement is offering an implied interest rate of Matthew s friend Gregory has hired a financial planner for advice on retirement Considering Gregory s current expenses and expected future lifest changes the financial planner has stated that once Gregory crosses a threshold of 4 136 860 in savings he will have enough money for retirement Gregory has nothing saved for his retirement yet so he plans to start depositing 40 000 in a retirement fund at a fixed rate of 5 00 at the end of each year It will take for Gregory to reach his retirement goal