Slope = (y2 - y1) / (x2 - x1)
Slope = -26 - (-14) / 8-4
Slope = -12 / 4
Slope = -3
17) 11.1
18) 21.4
19) 30.5
20) 16.5
21) 26.5
The effective annual interest rate is:
i = (1 + 0.064/12)^12 - 1 = 0.066
In year 1: the interest is $613.80 (multiple $9300 by 0.066)
In year 2: the interest is $654.31 (add interest from year 1 to $9300 and multiply by 0.066)
In year 3: the interest is $656.98 (do the same as year 2)
In year 4: the interest is $657.16
The total interest is: $2582.25
The present worth of this amount is:
P = 2582.23 / (1 + 0.066)^4 = $1999.72
The answer is $1999.72.
