Question

You have $2500 and want it to grow to $3600 in 2 years , what compound interest rate (compounded annually ) do you need ?

Answer 1

18.2%

Explanation:

Given data

Principal= $2500

Final amount= $3600

Time = 2 years

Rate=???

The expression for the rate is given as

r= ln(A/P)/t

substitute

r= ln(2500/3600)/2

r= ln(0.6944)/2

r= -0.364/2

r= 0.182

Hence the rate is 18.2%