If an investment of $2500 grows to $4406.43 in nine years with interest compounded annually, what is the interest rate? (Round your answer to one decimal place.)

Question

tkhunny · Answer

One Deposit.
Level Interest Rate.$$$2,500.00(1+i)^{9}\;=\;$4,406.43$$Solve for i.

anonymous · Answer

@tkhunny how would you work this problem out? I tried to solve it and it didn't work as I thought it would have.

tkhunny · Answer

What did you try?  I would divide by $2,500.00, first.  Then it looks like a logarithm would get us the rest of the way.

anonymous · Answer

@tkhunny Yep I did that then I got (1+i)^9=1.76 . Then how would you use log into this?

tkhunny · Answer

Let's please use more decimal places than that,  1.762572

You need this logathm rule: $$\log(a^{b}) = b\cdot\log(a)$$

tkhunny · Answer

* logarithm