LG 6 P5-51 Growth rates You are given the series of cash flows shown in the following table.
Cash flows
Year
A
B
C
1
$500
$1,500
$2,500
2
560
1,550
2,600
3
640
1,610
2,650
4
720
1,680
2,650
5
800
1,760
2,800
6
1,850
2,850
7
1,950
2,900
8
2,060
9
2,170
10
2,280
a. Calculate the compound annual growth rate between the first and last payment
in each stream.
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PART 2 Financial Tools
b. If year-1 values represent initial deposits in a savings account paying annual in-
terest, what is the annual rate of interest earned on each account?