Answer:
DMF paying to borrow money at 7.78% return per year
Explanation:
given data
future value = $100,000
present value = $22,364
time period t = 20 year ( March 28, 2008 to March 28, 2028 )
solution
we get here rate of interest by the future value formula that is express as
rate = [tex](\frac{future\ value}{present\ value})^{1/t} -1[/tex] ...............................1
put here value and we get rate of interest that is
rate = [tex](\frac{100000}{22364})^{1/20} - 1[/tex]
solve it and we get
rate = 0.0778
rate = 7.78 %
so DMF paying to borrow money at 7.78% return per year
