SOLUTION: Find the interest rate to the nearest hundredth of a percent that will produce $2000, if $1500 is left at interest compounded semiannually for 4.5 yr. Use the formula A=P(1+r/n)
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-> SOLUTION: Find the interest rate to the nearest hundredth of a percent that will produce $2000, if $1500 is left at interest compounded semiannually for 4.5 yr. Use the formula A=P(1+r/n)
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Question 1148786: Find the interest rate to the nearest hundredth of a percent that will produce $2000, if $1500 is left at interest compounded semiannually for 4.5 yr. Use the formula A=P(1+r/n)^tn Found 2 solutions by greenestamps, josmiceli:Answer by greenestamps(13209) (Show Source):
You are given...
A=2000 final amount
P=1500 beginning amount (principal)
n=2 number of compounding periods per year
t=4.5 number o years
The unknown is r (annual interest rate).
The unknown is in an exponent; if an algebraic solution is required, you need to use logarithms.
Take logs of both sides... = .013882 to 6 decimal places
Take anti-logs.... = 1.032481 to 6 decimal places
The interest rate (rounded) is 6.5%.
CHECK: = 2000.33 to 2 decimal places
If an algebraic solution is not required, by far the easiest path to the answer is to graph y = 1500(1+x/2)^9 and y = 2000 on a graphing calculator and find where they intersect.
