Question

You want to have $5,118 in 8 years. If you have $4,053 to invest today, what interest rate must you earn?

Answer 1

Amount investing = 4053

Amount after 8 years = 5118

Therefore Interest =

As per Simple Interest,

I = Principal amount invested

N = Number of years

R = Rate of interest

%

Simple Interest method, the Interest rate = 3.28%

As per Compound interest method,

A = Amount after the investment period

P = Invested amount

i = Interest rate

%

Compound Interest method, the Interest rate = 2.95 %