Question

What is G if B = A × (1+G)T and B = 3,455, A = 1,969, and T = 8? Answer as a rate in decimal format so that 12.34% would be entered as .1234 and 0.98% would be entered as .0098.

Answer 1

G=0.0728

Explanation:

The expression given is:

`B=A*(1+G)^T`

This expression has the format of a compounded interest at a rate G for a time T. If B = 3,455, A = 1,969, and T = 8, the value of the rate G is determined by:

`3,455=1,969*(1+G)^8\\G = \sqrt[8]{(3,455)/(1,969)}-1\\G=0.0728`

The rate G is 0.0728.