Question

For an investment to grow eightfold in nine years, at what rate would it have to grow?

Answer 1

The formula we will use to calculate the rate of interest is:
Final amount=(Principal amount)*(1+Rate of interest)^Number of years
Given that the investment will grow eight fold in nine years. So, final amount=8*Principal amount
=>8*Principal amount=(Principal amount)*(1+Rate of interest)^Number of years
=>8=(1+Rate of interest)^9
=>8^(1/9)=1+Rate of interest
=>1.25992105=1+Rate of interest
=>1.25992105-1=Rate of interest
=>Rate of interest=0.25992105 or 25.99% (Rounded to two decimal places)