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anonymous
 one year ago
You have $5,000 to invest, and want it to grow to $20,000 in ten years. What interest rate would you need to find to make this possible?
anonymous
 one year ago
You have $5,000 to invest, and want it to grow to $20,000 in ten years. What interest rate would you need to find to make this possible?

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mathstudent55
 one year ago
Best ResponseYou've already chosen the best response.0Simple interest, compound interest, if compound, compounded how many times per year?

wolf1728
 one year ago
Best ResponseYou've already chosen the best response.1The formula for compound interest is: Total = Principal * (1 + rate) ^ years We have to solve this for rate: log(1 + rate) = {log(total) log(Principal)} ÷ Years log(1 + rate) = {log 20,000  log 5,000} ÷ 10 log(1 + rate) = {4.3010299957  3.6989700043} ÷ 10 log(1 + rate) = {0.6020599914} ÷ 10 log(1 + rate) = 0.06020599914 1 + rate = 10^0.06020599914 1 + rate = 1.148698355 rate = .148698355 OR rate = 14.8698355% That is a very high rate because you want your money to increase 4 times in just 10 years. Here is a calculator to check your answer. http://www.1728.org/compint.htm

mathstudent55
 one year ago
Best ResponseYou've already chosen the best response.0If the interest is continuously compounded, then it is this formula: \(\large A = Pe^{rt} \) \(\large 20,000 = 5,000 e^{r(10)} \) \(\large 4 = e^{10r} \) \(\large \ln 4 = \ln e^{10r} \) \(\large \ln 4 = 10r\) \(\large r = \dfrac{\ln 4}{10}\) \(\large r = 0.1386\) \(\large r = 13.86\%\)
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