You have 1,000, and want it to grow to 2,000 in 4 years, what compound interest rate do you need?
11.89%
18.92%
25%
41.42%
Explanation:
Use the formula:PV=$[\dfrac{(PV)^{\dfrac{1}{n}}}{FV}]-1$
substitute FV=2000 ,PV=1,000 and n=4
therefore r=$[\dfrac{(1000)^{\dfrac{1}{4}}}{FV}]-1$
=$(2)^1/4 -1$
=1.1892-1
=0.1892
=18.92%
Use the formula:PV=$[\dfrac{(PV)^{\dfrac{1}{n}}}{FV}]-1$
substitute FV=2000 ,PV=1,000 and n=4
therefore r=$[\dfrac{(1000)^{\dfrac{1}{4}}}{FV}]-1$
=$(2)^1/4 -1$
=1.1892-1
=0.1892
=18.92%