SOLUTION: What rate of interest, to the nearest tenth of a %, compounded annually is needed for an investment of $200 to grow to $350 in 5 years? Thank you in advance for helping me set th

Question 177262This question is from textbook college algebras
: What rate of interest, to the nearest tenth of a %, compounded annually is needed for an investment of $200 to grow to $350 in 5 years?
Thank you in advance for helping me set this up and compute the answer. This question is from textbook college algebras

Answer by jim_thompson5910(35256) (Show Source): You can put this solution on YOUR website!
Start with the compound interest formula where A is the return, P is the principal (the amount invested), r is the interest rate, n is the compound frequency, and t is the time (in years)

Plug in , , , and

Multiply

Reduce

Divide both sides by 200.

Divide.

Take the 5th root of both sides.

Take the 5th root of 1.75 to get 1.118 (this is approximate)

Subtract 1 from both sides.

Combine like terms.

So the answer is which is roughly 11.84%

So the interest rate needed is about 11.84%
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