Computation of growth rate and interest rate
1. The following table presents the Sally's Silly Service Company's net earnings for the past six years. Compute the growth rate in the company's earnings.
Year Return
2002 $2,659
2001 2,500
2000 2,370
1999 2,100
1998 1,890
1997 1,728
2. Timothy borrows $6,930 from the bank. For a four?year loan, the bank requires annual end?of?year payments of $2,281.86. Calculate the interest rate on the loan.
3. Tom is evaluating the growth rate in dividends of a company over the past 6 years. What is the annual compound growth rate if the dividends are as follows:
Year Dividends
1997 $1.38
1998 1.52
1999 1.85
2000 1.80
2001 1.95
2002 2.15