Question

Paisley is going to invest $28,000 and leave it in an account for 14 years. Assuming the interest is compounded monthly, what interest rate, to the nearest tenth of a percent, would be required in order for Paisley to end up with $74,000?

Answer 1

r=7

Explanation:

74000=28000(1+r/12)^12(14)

divide 74000 by 28000, and cancel out 28000.

1.00580=1+r/12

(100) .06962=r

r = 6.96198

the 6 after the 9 rounds 9 to 0, which rounds the 6 to 7

r=7