Calculate the interest rate necessary to create cash flow

Reference no: EM13203110

A geometrically increasing series of 20 end of year payments is deposited to fund an account. The first payment is $20,000, the geometric factor is 4%. The account is used for retirement purposes and will produce 30 consecutive annual payments of $60,000, starting at the end of year 16. Calculate the interest rate necessary to create this cash flow.

If the $60,000 payments start at the same point, but go on forever, what is the interest rate?

Reference no: EM13203110

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