<PRE><B>Question 1140163</B>
f = p * (1 + r) ^ n


f is the future value
p is the present value
r is the interest rate per time period
n is the number of time periods


in this problem, formula becomes:


22500 = 12550 * (1 + r) ^ 5


divide both sides of the equation ty 12550 to get:


(22500 / 12550) = (1 + r) ^ 5


take the fifth root of both sides of the equation and subtract 1 from both sides of the equation to get:


(22500 / 12550) ^ (1/5) - 1 = r


solve for r to get r = .1238484694.


confirm by multiplying 12550 by (1 + .1238484694) ^ 5 to get 22500.


the answer is confirmed, so the solution is that the annual interest rate is .1238484694, or 12.38484694%.


</PRE>