Suppose a bank is offering the following deal. If you deposit $100 today, you will be able to withdraw $10 in one year and $105 ub two years. After that no payment will be made.
How much is the interest rate that the bank is offering in this deal?
How much money will be kept after the $10 withdrawal?
How much will be kept money after 1 year?
Can you setup the equation with r as the only unknown?
