Question

Question 1

When Johan received his share of a company, he invested RM24940. 56 at a rate of k% compounded monthly. Twenty years later, the amount accumulated was 150100. Find the value of k.

Answer 1

Future Value = C*[(1+(r/m))^mt]
where C is the present value
r is the interest rate
t is the year
m is the compounding period
C = RM 24940.56
r = k
t = 20
m is the compounding period that is 12.
Future value = 150100.
150100 = 24940.56*[(1+(k/12)^240]
[(1+(k/12)^240] = 6.0183
(1+(k/12)) = 6.0183^(1/240)
(1+(k/12)) = 1.007506
(k/12)) = .007506
k = .090077
k = 9.0077%.