Hello, I am trying to determine an interest rate by solving the following equation: fsolve(@(r) 200*(1+r)^(4)+300*(1+r)^(3)+400*(1+r)^(2)+500*(1+r)^(1)-1000,0)
What really puzzles me is that Octave will not give me a solution that makes sense: it gives me a negative interest rate!! In plain English, the problem is as follows: one invests 1000$ at year 1, and receives 200 at year 2, 300 at year 3, 400 at year 4 and 500 at year 5.
I have to find out the interest rate of this investment... Can anyone please help? Thanks in advance, Julien.