SOLUTION: Suppose $20,000 is invested into an account where interest is compounded semiannually. After 30 years the balance is $231,165.
What was the interest rate as a percent?
Round
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Question 955652: Suppose $20,000 is invested into an account where interest is compounded semiannually. After 30 years the balance is $231,165.
What was the interest rate as a percent?
Round the answer to the nearest hundredth of a percent.
Answer by lwsshak3(11628) (Show Source): You can put this solution on YOUR website!
Suppose $20,000 is invested into an account where interest is compounded semiannually. After 30 years the balance is $231,165.
What was the interest rate as a percent?
Round the answer to the nearest hundredth of a percent.
***
Compound Interest Formula: A=P(1+r/n)^nt, P=initial investment, r=interest rate, n=number of compounding periods per year, A=amt after t-years
For given problem:
P=20000
r=interest rate(to be determined)
n=2
t=30
A=amt after 30 yrs
...
231165=20000(1+r/2)^2*30
231165/20000=(1+r/2)^60
11.5583=(1+r/2)^60
raise both sides to the 1/60th power
1.04163=1+r/2
r/2=1.04163-1=.04163
r=.02082=2.082%
What was the interest rate as a percent? 2.082%
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