Question

With what percent of annual rate of interest will 18,200 becomes 23,660 in 5 years

Answer 1

Answer:

5.39 per cent per year

Step-by-step explanation:

P = initial amount = 18200

R = rate of interest per cent per year = ?

T = time period in years = 5

A = final amount at the end of period T = 23660

We know that:

A = P(1 + R/100)^T

Solving for "R", we get:

R = 100*[(A/P)^(1/T) - 1]

Using the given values, we get:

R = 100*[(23660/18200)^(1/5) - 1]

  = 100*[(1.3)^(1/5) - 1]

  = 100*(1.0539 - 1)

   = 100*(0.0539)

   = 5.39

Required rate of interest is 5.39 per cent per year

(You will need a calculator or log table to compute)