Problema Solution
dale inherited $30,000 and invested it in a mutual fund for two years. At the end of the two years, her investment had grown to $40,368. Determine the annual compound interest rate that would yield this amount of money. Use the compound interest formula An=P(1+r)^n
Answer provided by our tutors
40,368 = 30,000(1+r)2
(1+r)2 = 40368/30,000
1+r =√1.3456 = 1.16
r = 1.16-1= 0.16 = 16%