Question

You have $2,000 to invest, and want it to grow to $3,000 in two years. What interest rate would you need to find to make this possible?

Answer 1

The compound Interest formula is
Total = Beginning Amount * (1 + rate)^years

We have to solve this for rate
log(1 + rate) = {log(total) -log(Principal)} ÷ Years

log(1 + rate) = {log(3,000)-log(2,000)} ÷ 2
log(1 + rate) = { 3.4771212547 - 3.3010299957 } ÷ 2
log(1 + rate) = 0.176091259 ÷ 2
log(1 + rate) = 0.0880456295
1 + rate = 10^0.0880456295
1 + rate = 1.2247448713
rate = .2247448713 OR
rate = 22.47448713%

That is a VERY high interest rate because you want to increase your money by 150% in just two years.