ST-3. This is a simple compound interest problem in which FV9 is eight times larger than PV Here again, three of the four variables are known: n =9 years, FV9 =8, and PV=1, and we are solving for i. Substituting these values into equation 5-6, we find FV9 =PV(1 + i)"

FV9 = PV(FVIFi ,,,)

8 = 1 (FVIF 9 s) J,ı yr 8.00 = FVIF 9yr

" s Thus, we are looking for an FVIFi,9yrs with a value of 8 in Appendix B, which occurs in the nineyear row. Ifwe look in the nine-year row for a value of 8.00, we find it in the 26 percent column

(8.004). Thus, the answer is 26 percent.