SOLUTION: 2) $5000 is invested for 10 year compounds quarterly, at the end of the 10 years the amount as grown to $11,500. What is the annual interest percentage rate to the rounded to the n

Algebra ->  Rational-functions -> SOLUTION: 2) $5000 is invested for 10 year compounds quarterly, at the end of the 10 years the amount as grown to $11,500. What is the annual interest percentage rate to the rounded to the n      Log On


   

Question 133501: 2) $5000 is invested for 10 year compounds quarterly, at the end of the 10 years the amount as grown to $11,500. What is the annual interest percentage rate to the rounded to the nearest 100th?
Answer by jim_thompson5910(35256) About Me  (Show Source):
You can put this solution on YOUR website!
A=P%281%2Br%2Fn%29%5E%28nt%29 Start with the given equation


11500=5000%281%2Br%2F4%29%5E%284%2A10%29 Plug in A=11500, P=5000, n=4, and t=10



11500=5000%281%2Br%2F4%29%5E%2840%29 Multiply


2.3=1%2Br%2F4%29%5E%2840%29 Divide both sides by 5,000


root%2840%2C2.3%29=root%2840%2C%281%2Br%2F4%29%5E%2840%29%29 Take the 40th root of both sides


1.02104=1%2Br%2F4 Simplify


0.02104=r%2F4 Subtract 1 from both sides


0.08416=r Multiply both sides by 4


r=0.08416 Rearrange the equation


So to the nearest hundredth, the annual interest rate is 8.42%