SOLUTION: Chris Lynch plans to invest $200 into a money market account. Find the interest rate that is needed for the money to grow to ​$1,200 in 122 years if the interest is compounde

Algebra ->  Finance -> SOLUTION: Chris Lynch plans to invest $200 into a money market account. Find the interest rate that is needed for the money to grow to ​$1,200 in 122 years if the interest is compounde      Log On


   

Question 1033512: Chris Lynch plans to invest $200 into a money market account. Find the interest rate that is needed for the money to grow to ​$1,200 in 122 years if the interest is compounded quarterly.
Answer by robertb(5830) About Me  (Show Source):
You can put this solution on YOUR website!
From the compound balance formula A+=+P%281%2Br%2Fn%29%5E%28nt%29,
we get 1200+=+200%281%2Br%2F4%29%5E%284%2A122%29, or 6+=%281%2Br%2F4%29%5E488, or
r+=+4%2A%28root%28488%2C6%29+-+1%29+=+0.0147, to three significant figures.
==> The interest rate should be 1.47%.