SOLUTION: What interest rate (compounded annually) is needed to enable an investment of $5000 to accumulate to $10000 in 12 years?

Algebra ->  Customizable Word Problem Solvers  -> Finance -> SOLUTION: What interest rate (compounded annually) is needed to enable an investment of $5000 to accumulate to $10000 in 12 years?       Log On

Ad: Over 600 Algebra Word Problems at edhelper.com


    

Question 1004733: What interest rate (compounded annually) is needed to enable an investment of $5000 to accumulate to $10000 in 12 years?
Answer by fractalier(6550) About Me  (Show Source):
You can put this solution on YOUR website!
We use the formula
A(t) = Ao * (1+r)^t
Plugging in we get
10000 = 5000(1+r)^12
2 = (1+r)^12
1+r = 2^(1/12)
r = 2^(1/12) - 1 = 5.95%