Hey good job, MissL; very clear now :wink:

OK; what we have using financial formula:

2000[(1 + i)^21 - 1] / i = 65727.82 : 21 is number of semi-annual periods in 10 1/2 years

And we want to solve for i, the interest rate used at every semiannual period.

Unfortunately, "i" cannot be isolated in such equations, so you need to go by

"trial and error": try rates until you hit one that works!

This is a process known as iteration.

Is this all news to you?

Anyway, rate comes out to be 4.25%; I have a cheap financial calculator

that "does the work" on these.

So 2000[(1.0425)^21 - 1] / .0425 = 65727.82