SOLUTION: What interest rate (compounded annually) is needed to enable an investment of $5000 to accumulate to $10000 in 12 years?
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Question 1004733: What interest rate (compounded annually) is needed to enable an investment of $5000 to accumulate to $10000 in 12 years?
Answer by fractalier(6550) (Show Source): You can put this solution on YOUR website!
We use the formula
A(t) = Ao * (1+r)^t
Plugging in we get
10000 = 5000(1+r)^12
2 = (1+r)^12
1+r = 2^(1/12)
r = 2^(1/12) - 1 = 5.95%
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