Problema Solution
If $5,000 is invested for 2 years, compounded annually, yields a return of $724.50, at what rate was it invested?
Answer provided by our tutors
We assume the rate is R
So the return = $5000*(1+R)^2 - $5000 = 724.50
We solve it
R = 0.07 = 7%
So the rate is 7%