Ned currently has an account balance of $3,634.51. He opened the account 13 years ago with a deposit of $2,564.65. If the interest compounds twice a year, what is the interest rate on the account?

Question

anonymous · Answer

no idea to do this some pneone please help immediately

anonymous · Answer

this web page explains it nicely http://www.purplemath.com/modules/expofcns4.htm

anonymous · Answer

man no one cant't help me

mathstudent55 · Answer

The formula for future value is:
F = P(1 + r/n)^(nt)
Where F = future value,
P = present value (or principal),
r = interest rate written as a decimal,
n = number of times interest is compounded per year, 
t = time in years

anonymous · Answer

Thanks

mathstudent55 · Answer

You know F = 3634.51, t = 13, n = 2, P = $2564.65. Substitute all those values in the formula, and solve for r.

anonymous · Answer

what' the rate

mathstudent55 · Answer

Solve this equation for t:
3634.51 = 2564.65*(1 + t/2)^(2*13)

anonymous · Answer

i got 1.47

anonymous · Answer

is that right :)

mathstudent55 · Answer

BTW, I meant to write r where t is in the equation with numbers. The equation is still correct, but where I wrote t, replace it with r.
Solve this equation for r.
3634.51 = 2564.65*(1 + r/2)^(2*13)
r can't be 1.47. Since r is the interest rate as a decimal that would mean the interest rate was 147%. That's not right.

anonymous · Answer

the answer is 1.4

anonymous · Answer

percent

mathstudent55 · Answer

3634.51 = 2564.65*(1 + r/2)^(2*13) First, divide both sides by 2564.65
3634.51/2564.65 = (1 + r/2)^26 After doing the division on the left side, take the 26th root of both sides.

mathstudent55 · Answer

I don't have a calculator on me, so I can't check on the answer.

anonymous · Answer

what did u get as yur final answer

anonymous · Answer

?

mathstudent55 · Answer

I don't have a calculator on me, so I can't check on the answer.

mathstudent55 · Answer

I can tell you what to do step by step, and you use your calculator to get the answer.

mathstudent55 · Answer

3634.51/2564.65 = (1 + r/2)^26 
First, divide 3634.51 by 2564.65

mathstudent55 · Answer

Ok, I found the Google calculator. I'm doing it now.

mathstudent55 · Answer

I get r = 0.027

anonymous · Answer

ok i plugged it in and got 1.4%

mathstudent55 · Answer

I got r = 0.027, so the interest rate is 2.7%

anonymous · Answer

ohh ok isee how u did it :0