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Math Help - Calculating Interest

  1. #1
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    Calculating Interest

    A) Find the interest rate needed for an invesment of 22000 dollars to grow to an amount of 32750 dollars in 7 years if the interest is compounded monthly?
    I got 4.98% can someone varify?

    b) How long will it take 22 000 to grow to 32224 dollars if the investment eats interest at the rate of 7.5% monthly?

    ______ years?
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  2. #2
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    Quote Originally Posted by B-lap View Post
    A) Find the interest rate needed for an invesment of 22000 dollars to grow to an amount of 32750 dollars in 7 years if the interest is compounded monthly?
    I got 4.98% can someone varify?

    b) How long will it take 22 000 to grow to 32224 dollars if the investment eats interest at the rate of 7.5% monthly?

    ______ years?
    a) 22000\left(1 + \frac{.0498}{12}\right)^{84} = 31153.32881

    b) 32224 = 22000\left(1+ \frac{.075}{12}\right)^{12t}

    solve for t
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  3. #3
    Member pflo's Avatar
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    Quote Originally Posted by B-lap View Post
    A) Find the interest rate needed for an invesment of 22000 dollars to grow to an amount of 32750 dollars in 7 years if the interest is compounded monthly?
    I got 4.98% can someone varify?

    b) How long will it take 22 000 to grow to 32224 dollars if the investment eats interest at the rate of 7.5% monthly?

    ______ years?

    I do not get the same answer as you for this compound interest problem:
    B=P(1+\frac{r}{n})^{nt}
    32750=22000(1+\frac{r}{12})^{12*7}
    1.4886364=(1+\frac{r}{12})^{84}
    1.0047477=1+\frac{r}{12}
    0.0047477=\frac{r}{12}
    0.0569720=r
    So I get a 5.7% interest rate.

    For the second part of this problem, use the same formula.
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