Asked by Taylor
What rate of interest, to the nearest tenth of a percent, compounded quarterly is needed for an investment of $1700 to grow to $2600 in 12 years?
I am given the formula A=P(1+r/n)^nt
I am given the formula A=P(1+r/n)^nt
Answers
Answered by
Steve
so, solve for r:
2600 = 1700(1+r/4)^(4*12)
26/17 = (1+r/4)^48
(26/17)^(1/48) = 1+r/4
r = 4[(26/17)^(1/48) - 1]
r = 0.0355
= 3.55%
actually 3.55641% yields 2599.9999
which is pretty darn close
2600 = 1700(1+r/4)^(4*12)
26/17 = (1+r/4)^48
(26/17)^(1/48) = 1+r/4
r = 4[(26/17)^(1/48) - 1]
r = 0.0355
= 3.55%
actually 3.55641% yields 2599.9999
which is pretty darn close