SOLUTION: Does anyone know how to solve the compound interest formula for RATE? Likely we are all familiar with the compound interest formula, thus: {{{A=(P(1+(r/n))^(n*t))}}} Where:

Algebra ->  Finance -> SOLUTION: Does anyone know how to solve the compound interest formula for RATE? Likely we are all familiar with the compound interest formula, thus: {{{A=(P(1+(r/n))^(n*t))}}} Where:       Log On


   

Question 318347: Does anyone know how to solve the compound interest formula for RATE?
Likely we are all familiar with the compound interest formula, thus:
A=%28P%281%2B%28r%2Fn%29%29%5E%28n%2At%29%29
Where:
A = amount
P = principle
r = rate (percent written as a decimal term)
n = number of compounding periods per year (i.e., quarterly = 4)
t = number of years
One of the tutors was so good as to solve this formula for TIME, thus:
t=%28LOG%28A%2FP%29%29%2F%28n%2A%28LOG%281%2B%28r%2Fn%29%29%29%29
Does anyone know how to solve this formula for the RATE? Stan has $1,500.00 and would quite like to have $5,000 in five years on a compound interest account. What interest rate must he fetch to meet this goal?
Thanks so very much for any reply,
Charlie Bass
Abilene, TX
cfbass@yahoo.com
Answer by scott8148(6628) About Me  (Show Source):
You can put this solution on YOUR website!
dividing by P ___ A%2FP+=+%281+%2B%28r%2Fn%29%29%5E%28n%2At%29

taking log ___ log%28A%2FP%29+=+%28n%2At%29log%28%281+%2B%28r%2Fn%29%29%29

dividing by (n*t) ___ %28%28log%28A%2FP%29%29+%2F+%28n%2At%29%29+=+log%28%281+%2B%28r%2Fn%29%29%29

reverse log ___ 10%5E%28%28%28log%28A%2FP%29%29+%2F+%28n%2At%29%29%29+=+1+%2B+%28r%2Fn%29

subtracting 1 ___ 10%5E%28%28%28log%28A%2FP%29%29+%2F+%28n%2At%29%29%29+-+1+=+%28r%2Fn%29

multiplying by n ___ n%2810%5E%28%28%28log%28A%2FP%29%29+%2F+%28n%2At%29%29%29+-+1%29+=+r