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Math Help - help me please, finding interest rates

  1. #1
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    Exclamation help me please, finding interest rates

    I need help with this problem please.

    Find the annual rate of growth (interest rate) on an account that was worth $150 in 1972 and $540.53 in 1994.
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  2. #2
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    Quote Originally Posted by takkun0486
    I need help with this problem please.

    Find the annual rate of growth (interest rate) on an account that was worth $150 in 1972 and $540.53 in 1994.
    Let the interest rate be x \%, and the principal be p then:
    after 1 year you have: (1+x/100)p
    after two years you have: (1+x/100)^2p
    :
    :
    after n years you have: (1+x/100)^np

    Now 1972 to 1994 is 22 years, so we have:

    <br />
540.53=(1+x/100)^{22}150<br />

    Which may be rewritten as:

    <br />
1+x/100=(540.53/150)^{1/22}<br />
,

    or:

    <br />
x=100[(540.53/150)^{1/22}-1]<br />

    RonL
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