anonymous
  • anonymous
Pls Help!! Use the formula B=P(1+(r/n))nt which is used to calculate the final balance of an investment or a loan after being compounded. Following is a list of what each variable represents: B = the final balance P = the principal r = the annual percentage rate t = the time in years in which the principal is compounded n = the number of times the principal is compounded in a year Raul invests $40,000 in an account that is compounded annually. If, after two years, his balance is $45,796, what was the interest rate of the account?
Mathematics
  • Stacey Warren - Expert brainly.com
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SOLVED
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katieb
  • katieb
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anonymous
  • anonymous
Are u helping me ...thank you , thank you , thank you
anonymous
  • anonymous
yeah - sorry popcorn - i'll be back in about 5 minutes
anonymous
  • anonymous
hi - you formula is incorrect. It should be B=P(1+(r/n))^nt - nt is an exponent so: 45796 = 40000(1 + r)^2 n=1 once a year (1+r)^2 = 45796 / 40000 = 1.1449 taking logs 2 ln(1+r) = ln 1.1449 ln (1+r) = ln 1.1449 / 2 1+r = 1.07 r = .07 = 7 % annual rate

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anonymous
  • anonymous
ok working thru it
anonymous
  • anonymous
what is taking logs
anonymous
  • anonymous
it means using the logarithm of the expression - its useful if the x is in the power live 2^x. so if got 2^x = 3.2 we can write ln 2^x = ln 3.2 so x ln2 = ln 3.2 and then x =ln3.2/ln2. hey - i could have done this another way - i could have expanded (1+r)^2 and solved for x. - but the log way is ok
anonymous
  • anonymous
power like
anonymous
  • anonymous
k i think my level is at the expansion level not log...would you be able to show me the other way??
anonymous
  • anonymous
ok (1+r)^2 = 1.1.449 - hey - i've found another way we can take the square root of both sides 1 + r = sq rt 1.1449 =1.07 r = 1.07 - 1 = .07 I hope I haven't confused you with all these alternatives. I can't understand why I didn't see this easy way before!!
anonymous
  • anonymous
got it thanks...if you are bored I have two other questions out there ;-)
anonymous
  • anonymous
sorry popcorn its late here in uk and i've got an early start in the morning we are travelling to London to see my soccer team (Swansea) play a big game. I'll be here tomorrow evening.
anonymous
  • anonymous
works for me...have fun
anonymous
  • anonymous
bye

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