James purchased a bond for $3200, and ten months later he sold for $3700. What annual rate would he have to earn in a savings compounded monthly, to earn the same money on his investment?

Answer 1

let the monthly rate be i

3200(1+i)^12 = 3700
(1+i)^12 = 1.15625
take 12th root
1+i = 1.01217..
i = .01217..
annual rate compounded monthly = .14606
or appr 14.6%

Answer 2

The tight answer is 17.55% but I want to know how to get that the solution

Answer 3

The right answer is 17.55% but I want to know how to get that the solution please help

Answer 4

I have to read the question more carefully.
It clearly said 10 months and I used 12 months
so let's just make a simple change

(1+i)^10 = 1.15625
take the 10th root
1+i = 1.15625^(1/10)
1+i = 1.014624..

i = .014624
annual rate = 12(.014624) = .1755 or appr 17.55%