Solve the problem.
Find the required annual interest rate, to the nearest tenth of a percent, for $898 to grow to $1511 if interest is compounded monthly for 2 years.
The Equation is 898 * (1 + z)^24 = 1511
where z is the interest per month.
z = [ (1511/898) ^ (1/24) ] - 1
( "^(1/24" is more usually known as the 24th-root of ...)
z = 0,0219...
So the answer is 2,2%.
Comments
The Equation is 898 * (1 + z)^24 = 1511
where z is the interest per month.
z = [ (1511/898) ^ (1/24) ] - 1
( "^(1/24" is more usually known as the 24th-root of ...)
z = 0,0219...
So the answer is 2,2%.