Question

The equation for the future value of a deposit earning compound interest is equation, where

P = the initial deposit

t = years invested

r = rate at which interest is compounded annually

n = number of times the interest is compounded per year

After 10 years, a $2,000-dollar investment compounded annually has grown to $3600. What is the
interest rate to the nearest whole-number percent?
%The equation for the future value of a deposit earning compound interest is equation, where

P = the initial deposit

t = years invested

r = rate at which interest is compounded annually

n = number of times the interest is compounded per year

After 10 years, a $2,000-dollar investment compounded annually has grown to $3600. What is the
interest rate to the nearest whole-number percent?
%

Answer 1

Explanation:

FV = PV ( 1+ r/n)^(n*t)

Plug in the given numbers:

$3600 = $2000 ( 1+ r/1)^(1*10)

$3600 / 2000 = (1+r)^10 Take tenth root of both sides

1.06054 = 1 + r

r = .06054 or 6 % (rounded)