If the uniform series capital recovery factor is 0.1359 and the sinking fund factor is 0.0759, then the interest rate is 6%.

Question

Quizplus · Accepted Answer

The uniform series capital recovery factor is given by the formula:$$A = P * \frac{i}{(1 - (1 + i)^{-n})}$$where:* A is the uniform series capital recovery factor* P is the present value of the series* i is the interest rate* n is the number of periodsThe sinking fund factor is given by the formula:$$S = \frac{i}{(1 + i)^n - 1}$$where:* S is the sinking fund factor* i is the interest rate* n is the number of periodsIf the uniform series capital recovery factor is 0.1359 and the sinking fund factor is 0.0759, then we can solve for the interest rate using the following equations:$$0.1359 = \frac{i}{(1 - (1 + i)^{-n})}$$$$0.0759 = \frac{i}{(1 + i)^n - 1}$$Solving for i in both equations, we get:$$i = 0.06$$Therefore, the interest rate is 6%.

If the Uniform Series Capital Recovery Factor Is 0