Question

You have an investment account that started with ​$4 comma 000 10 years ago and which now has grown to ​$5 comma 000. a. What annual rate of return have you earned​ (you have made no additional contributions to the​ account)? b. If the investment account earns 17 % per year from now​ on, what will the​ account's value be 10 years from​ now?

Answer 1

2.26%

$24,034.14

Step-by-step explanation:

The formula for finding the interest rate is :

(FV/ PV) ^1/n - 1

FV = Future value

PV = Present value

R = interest rate

N = number of years

(5000/4000) ^ 1/n - 1 = 0.022565 = 2.26%

11. To find the future value in 10 years, this formula would be used:

FV = P (1 + r)^n

= $5000 (1.17)^10 = $24,034.14

I hope my answer helps you