SOLUTION: Jack needs $6000 in 6 years from today to buy a holiday. He invests $2800 today. Find the effective annual rate of interest that Jack needs to earn on this amount (as a %, 2 decima

Algebra ->  Finance -> SOLUTION: Jack needs $6000 in 6 years from today to buy a holiday. He invests $2800 today. Find the effective annual rate of interest that Jack needs to earn on this amount (as a %, 2 decima      Log On


   

Question 1161015: Jack needs $6000 in 6 years from today to buy a holiday. He invests $2800 today. Find the effective annual rate of interest that Jack needs to earn on this amount (as a %, 2 decimal places) in order to reach his goal.
Answer by ikleyn(52786) About Me  (Show Source):
You can put this solution on YOUR website!
.

6000 = 2800%2A%281%2Bx%29%5E6


6000%2F2800 = %281%2Bx%29%5E6


2.142857 = %281%2Bx%29%5E6


root%286%2C2.142857%29 = 1 + x


1.135444 = 1 + x


x = 0.135444   = 0.1354 (rounded) = 13.54%.    ANSWER


You may round it as you need.

Solved.