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Hans invests $550 at a rate of x% per year compound interest. At the end of 10 years, the value of the investment is $638.30, correct to the nearest cent. Find the value of x.

Guest Oct 7, 2017

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 #1
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FV = PV x [1 + R]^N

638.30 = 550 x [1 + R]^10      Divide both sides by 550

1.16054 = [1 + R]^10                  Take the 10th root of both sides

1.16054^(1/10) = 1 + R

1.015 = 1 + R                         Subtract 1 from both sides

R =0.015 x 100

R =1.50%  Interest rate compounded annually. 

Guest Oct 7, 2017
edited by Guest  Oct 7, 2017
edited by Guest  Oct 8, 2017
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1+0 Answers

 #1
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0
Best Answer

FV = PV x [1 + R]^N

638.30 = 550 x [1 + R]^10      Divide both sides by 550

1.16054 = [1 + R]^10                  Take the 10th root of both sides

1.16054^(1/10) = 1 + R

1.015 = 1 + R                         Subtract 1 from both sides

R =0.015 x 100

R =1.50%  Interest rate compounded annually. 

Guest Oct 7, 2017
edited by Guest  Oct 7, 2017
edited by Guest  Oct 8, 2017

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