You have 2,500, and want it to grow to 4,000 in 10 years, what compound interest rate do you need?
4.81%
6%
6.05%
7.18%
Explanation:
Use the formula:PV=$[\dfrac{(PV)^{\dfrac{1}{n}}}{FV}]-1$
substitute FV=4000 ,PV=2,500 and n=10
therefore r=$[\dfrac{(2,500)^{\dfrac{1}{n}}}{4,000}]-1$
=$(1.6)^0.1 -1$
=1.0481-1
=0.0481
=4.81%
Use the formula:PV=$[\dfrac{(PV)^{\dfrac{1}{n}}}{FV}]-1$
substitute FV=4000 ,PV=2,500 and n=10
therefore r=$[\dfrac{(2,500)^{\dfrac{1}{n}}}{4,000}]-1$
=$(1.6)^0.1 -1$
=1.0481-1
=0.0481
=4.81%