SOLUTION: You want to buy a new car in four years which will cost you $64000. If you have $50000 in your bank account now, how much is nominal interest rate (compounded annually) to reach yo

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Question 1121036: You want to buy a new car in four years which will cost you $64000. If you have $50000 in your bank account now, how much is nominal interest rate (compounded annually) to reach your goal?
Found 2 solutions by greenestamps, ikleyn:
Answer by greenestamps(13200) About Me  (Show Source):
You can put this solution on YOUR website!


50000%281%2Bx%29%5E4+=+64000

Use a graphing calculator or some similar tool to find the answer; or use logarithms:

%281%2Bx%29%5E4+=+64000%2F50000+=+1.28
4%2Alog%28%281%2Bx%29%29+=+log%28%281.28%29%29
log%28%281%2Bx%29%29+=+log%28%281.28%29%29%2F4+=+.0268 (to 4 decimal places; but you want to keep more decimal places to get an accurate answer)
x+=+10%5E%28.0268%29-1

You can finish the calculations....

Answer by ikleyn(52781) About Me  (Show Source):
You can put this solution on YOUR website!
.
50000%281%2Bx%29%5E4 = 64000


%281%2Bx%29%5E4 = 64000%2F50000 = 1.28


1 + x = root%284%2C1.28%29 = 1.0637. . . 


x = 1.0637 - 1 = 0.0637


Answer.  The interest rate of 0.0637 = 6.4% (approximately).