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25000=11000(1+r)^4

 Sep 25, 2015

Best Answer 

 #2
avatar+130518 
+5

25000=11000(1+r)^4   divide both sides by 11000

 

(25/11)  = (1 + r)^4   take the positive 4th root of each side

 

(25/11)^(1/4)  = 1 + r   subtract 1 from both sides

 

(25/11)^(1/4)  - 1 = r  = 0.2278 = about 22.78%

 

 

cool cool cool

 Sep 25, 2015
 #1
avatar
+5

If 4 is the number of years, then r=22.78% compounded annually.

If 4 is the number of quarters in 1 year, then r=59.28% compounded quarterly

 Sep 25, 2015
 #2
avatar+130518 
+5
Best Answer

25000=11000(1+r)^4   divide both sides by 11000

 

(25/11)  = (1 + r)^4   take the positive 4th root of each side

 

(25/11)^(1/4)  = 1 + r   subtract 1 from both sides

 

(25/11)^(1/4)  - 1 = r  = 0.2278 = about 22.78%

 

 

cool cool cool

CPhill Sep 25, 2015

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