can anyone help me with a formula for this?
What interest rate is required to earn $250 interest on a $999 investment over 3 years compounding daily
Thank You
Hello, xxpink__saltxx!
What interest rate is required to earn $250 interest on a $999 investment
over 3 years compounding daily?
The compound interest formula is: .
where: = final amount, = principal, = periodic interest rate, = number of periods.
We are given: .
Since the interest is compounded daily, the interest rate is:
. . and the number of periods is:
So we have: .
. . and we must solve for , the annual interest rate.
We have: .
Raise both sides to the power:
. .
. . Then: .
Therefore, the annual interest rate is about
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. . . Yes!