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Thread: Compound Interest

  1. March 23rd 2009, 04:03 PM #1
    tmac11522
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    Compound Interest

    A sum of $1000 was invested for 4 years, and the interest was compounded semiannually. If this sum amounted to $1441.26 in the given time, what was the interest rate?
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  2. March 23rd 2009, 04:25 PM #2
    skeeter
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    Quote Originally Posted by tmac11522 View Post
    A sum of $1000 was invested for 4 years, and the interest was compounded semiannually. If this sum amounted to $1441.26 in the given time, what was the interest rate?
    A = A_0\left(1 + \frac{r}{n}\right)^{nt}

    1441.26 = 1000\left(1 + \frac{r}{2}\right)^8

    solve for r
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