Answer to Question #134236 in Finance for Khalid

Question #134236
sarah transported 12,500$ in a bank 4 years back. she earned today a total amount of 15,500$ what was the rate of interest charged for her investmeny
1
Expert's answer
2020-09-21T08:57:26-0400

solution


Initial\ investment, \ P=12,500

Final\ value, \ C=15,500

Duration, \ n=4\ years


Let the interest rate =r


Assuming her initial investment is compounded annually;



C= P \ (1+r)^n15,500 = 12,500 \ (1+r)^41.24= (1+r)^4ln\ (1.24)= 4\ ln\ (1+r)0.0538= ln\ (1+r)e^{0.0538}= 1+r1.05525 -1= 0 .05525=r

answer: the rate of return on her investment is 5.525\%


Need a fast expert's response?

Submit order

and get a quick answer at the best price

for any assignment or question with DETAILED EXPLANATIONS!

Comments

No comments. Be the first!

Leave a comment

Ask Your question

LATEST TUTORIALS
New on Blog
APPROVED BY CLIENTS