Question

At what annual rate would the following have to be​ invested?

​$490 to grow to ​$1,180.82 in 13 years

​$300 to grow to ​$481.73 in 7 years

​$49 to grow to ​$697.36 in 19 years

​$200 to grow to ​$243.33 in 5 years

Answer 1

We use the formula:
A=P(1+r/100)^n
where
A=future value
P=present value
r=rate of interest
n=time period.

a.1,180.82=490*(1+r/100)^13

(1,180.82/490)^(1/13)=(1+r/100)

(1+r/100)=1.07

r=1.07-1

=7%(Approx)

b.481.73=300*(1+r/100)^7

(481.73/300)^(1/7)=(1+r/100)

(1+r/100)=1.07

r=1.07-1

=7%(Approx)

c.697.36=49*(1+r/100)^19

(697.36/49)^(1/19)=(1+r/100)

(1+r/100)=1.15

r=1.15-1

=15%(Approx).

d.243.33=200*(1+r/100)^5

(243.33/200)^(1/5)=(1+r/100)

(1+r/100)=1.04

r=1.04-1

=4%(Approx).