Pls help urgent help needed! What annual interest rate compounded annually is required to add 50% to an investment in exactly 20 years? Write your answer to 2 decimal places.

Question

terenzreignz · Answer

Well, let's call that interest rate r...
And your initial investment a....

So...
$$\huge a(1+r)^{20}=1.5a$$
Now solve for r.

anonymous · Answer

thanks

anonymous · Answer

@terenzreignz so what will the initial investment be and how did u get 1.5

terenzreignz · Answer

a is the initial investment, right?
And at the end of 20 years, it has to increase by 50%
so... it has to be
$$\huge a + \color{blue}{<50\% \ of \ a >}=a+0.5a=1.5a$$

terenzreignz · Answer

You can take the first step and do away with the a, by dividing both sides by a...
$$\huge (1+r)^n=1.5$$

terenzreignz · Answer

Sorry, replace n with 20, my bad :)

anonymous · Answer

thanks again @terenzreignz

terenzreignz · Answer

No problem :)

perl · Answer

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