1. ## [SOLVED] Interest rates!!

Using the formula

A= P(1 + r/n) ^tn

At what interest rate to the nearest hundredth of a percent, will 16,000 grow to 20,000 if invested for 5.25years and the interest is compounded quarterly?

2. Originally Posted by momuvfour
Using the formula

A= P(1 + r/n) ^tn

At what interest rate to the nearest hundredth of a percent, will 16,000 grow to 20,000 if invested for 5.25years and the interest is compounded quarterly?

$\displaystyle 20000 = 16000\left(1+\frac{r}{4}\right)^{(5.25)(4)}$

solve for $\displaystyle r$

3. ## I'm still stuck here

I understand the set up and I get about halfway through it but this is where I am stuck..

20000/16000 = (1+r/4)^21

1.25 = (1+r/4)^21

Any ideas from here? Sorry my math editor would not copy over..

4. Originally Posted by momuvfour
I understand the set up and I get about halfway through it but this is where I am stuck..

20000/16000 = (1+r/4)^21

1.25 = (1+r/4)^21

Any ideas from here? Sorry my math editor would not copy over..
Take the 21st root of both sides:

$\displaystyle 1+ \frac{r}{4} = \sqrt[21]{1.25}$

which can be evaluated on a calculator.

Also, if you want to see what someone has typed in LaTeX click on their working to give the code