Example Solving Compound Interest Word Problems : Find Compound Interest rate.
See Other Compound Interest Word Problem Examples solved by the Algebra Word Problem Solver.| A fund compounds interest monthly. if a principle of $14000 yields $45510 after a 5 year term, find the nominal annual interest rate. |
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Let A = Final Amount Let P = Principle Let r = Rate Let t = Time Let n = Interest periods per year Given: P = $14000 Given: A = $45510 Given: n = 12 Given: T = 5 YEARS nt
A = P(1+r/n)
12*5
45510 = 14000(1+r/12)
60
3.25071 = (1+r/12)
60
Ln(3.25071) = Ln((1+r/12) )
Ln(3.25071) = 60Ln(1+r/12)Ln(3.25071)/60 = Ln(1+r/12) 0.0196479 = Ln(1+r/12) 0.0196479 e = 1+r/120.0198422 = r/12 r = 0.238106 = 23.81% r = 0.238106 = 23.81% |