Question & Answer: RKI Instruments borrowed $4, 800, 000 from a private equity firm for expansion of its facility for manufacturing carbon monoxide monitors. The co…..

13 RKI Instruments borrowed $4,800,000 from a private equity firm for expansion of its facility for manufacturing carbon monoxide monitors. The company repaid the loan after 1 year with a single payment of $5,184,000. What was the interest rate on the loan?

RKI Instruments borrowed $4, 800, 000 from a private equity firm for expansion of its facility for manufacturing carbon monoxide monitors. The company repaid the loan after 1 year with a single payment of $5, 184, 000. What was the interest rate on the loan?

Expert Answer

Solution: 8%

Working:

4,800,000 ( 1+ r/100) = 5,184,000

1+ r/100 = 1.08

r/100 = 0.08

r=8%

Check : 4800,000 + 4800,000 *8% = 5,184,000

Still stressed from student homework?

Get quality assistance from academic writers!

Order now