document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=1120055>Question 1120055</A>: <I><SPAN STYLE=\"word-break: break-all;\"> Use graphical approximation techniques or an equation solver to approximate the desired interest rate. A person makes annual payments of $ 1000 into an ordinary annuity. At the end of 5 &#8203;years, the amount in the annuity is $ 5703.88. What annual nominal compounding rate has this annuity&#8203; earned? </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #735726 by </B><A HREF=/tutors/aboutme.mpl?userid=Boreal><B>Boreal(15235)</B></A><img src=\"/images/stars/stars-13.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=Boreal><IMG SRC=http://www.algebra.com/images/aboutme-small.gif BORDER=0 alt=\"About Me\" VALIGN=MIDDLE></A>&nbsp;<IMG SRC=http://www.algebra.com/cgi-bin/show-face.mpl?user=Boreal><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=735726\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> FV=Payment (1+i)^n)-1/i<BR>\n" );
document.write( "5703.88=1000(1+i)^n-1/i<BR>\n" );
document.write( "5.70388=(1+i)^5-1/i<BR>\n" );
document.write( "Picking 0.03<BR>\n" );
document.write( "(1+.03)^5=1.16, so 0.16/0.03=$5333.33<BR>\n" );
document.write( "try -.04<BR>\n" );
document.write( "1.2167-1/0.04=0.2167/0.04=5.416<BR>\n" );
document.write( "Try 0.07<BR>\n" );
document.write( "1.2762-1/.05=5.751, a little too big<BR>\n" );
document.write( "try 0.069 and get 5.739<BR>\n" );
document.write( "0.066 and get 5705.02<BR>\n" );
document.write( "0.0659 will give the answer.<BR>\n" );
document.write( "Interest rate is 6.59% </SPAN>\n" );
document.write( "</TD></TR></TABLE>\n" );