SOLUTION: How long would n $800 investment take to earn $160 at a rate of 5% annually? What is the interest rate if you earned $504 on an $1800 investment for 4 years?

Question 1112194: How long would n $800 investment take to earn $160 at a rate of 5% annually?

What is the interest rate if you earned $504 on an $1800 investment for 4 years?

Answer by Boreal(15235) (Show Source): You can put this solution on YOUR website!
It would then be $960
960=800(1+.05)^n
divide by 800 both sides
1.2=1.05^n
ln 1.2=n ln 1.05
n=ln 1.2/ln 1.05=3.11 years
2304=1800(1+r)^4
1.28=(1+r)^4
ln 1.28=4 ln (1+r)
ln(1+r)=0.0617, don't round
raise everything to the e power
1+r=e^0.0617=1.064
r=0.064 or 6.4%
RELATED QUESTIONS
If interest is earned at the rate of 5%, compounded annually, how long will it take an... (answered by addingup)

If I deposited $1000 at a 5% interest rate annually and wanted to know how long it would... (answered by edjones)

Approximately how long would it take an investment that is compounded annually to triple... (answered by Alan3354)

May has $10,000 to invest for five years. How much additional interest will she earn if (answered by Theo)

How long does a $4000 investment take to earn $720 interest if the interest rate is 6%... (answered by stanbon)

The formula for an investment worth with interest compounded annually is A = P(1 + i)^n,... (answered by Theo)

The formula for an investment worth with interest compounded annually is A=P(1+i)^n,... (answered by MathLover1,Theo)

If r is the nominal rate and n is the number of times interest is compounded... (answered by ikleyn,Theo)

How long will it take a $9000 investment to earn $180 interest at an annual interest rate (answered by Nate)