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.
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.
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.
