Question

Gabriel is going to invest $440 and leave it in an account for 15 years.

Answer 1

The interest rate of the investment is: 1.42%

How to find the interest rate?

To find the interest rate required for Gabriel to end up with $570 after 15 years of compounding interest quarterly, we can use the formula for compound interest:

A = P(1 + r/n)
`.^(nt)`

Where:

A = Final amount

P = Principal amount (initial investment)

r = Annual interest rate (in decimal form

n = Number of times interest is compounded per year

t = Number of years

Since we want to find the interest rate, we can rearrange the formula:

r = ( (A / P)
`.^(nt)`) ) - 1

Plugging in the given values, we have:

r = ( (570 / 440)^(1/(4*15)) ) - 1

r ≈ 0.0142

To convert the decimal form to a percentage, we multiply by 100:

r ≈ 0.0142 * 100 ≈ 1.42%

Therefore, Gabriel would require an interest rate of 1.42% in order to end up with $570 after 15 years of compounding interest quarterly.

Complete question is:

Gabriel is going to invest $440 and leave it in an account for 15 years. Assuming the interest is compounded quarterly, what interest rate, to the nearest tenth of a percent, would be required in order for Gabriel to end up with $570?