Question

Jacob has $6,000 that he has saved from doing odd jobs

around the neighborhood. When he graduates from
college in six years, he would likke to have $12,000 to use
as a down payment on a new car. If Jacob is going to
realize his dream, what interest rate will he have to invest
his money at? *

Answer 1

I think if he invests at an interest rate of 0.1666 which times 100 is 16.66% he will have 12,000 in 6 years assuming its being compounded annually. Using the equation r = (1/t)(A/P - 1) or A=P(1+r/n)^nt And plugging in numbers: 12,000=6000(1+r/1)^(6)(1) and solving for r.