Question

Question 2 If you deposit today $6,756.76 in an account for 6 years and at the end accumulate $10,000, how much compound interest rate should you earn? 8% 9.4% 6.75% 2.5%

Answer 1

Deposit, P = $ 6,756.76

Future value, F = $ 10,000

Time, n = 6 years

F = P(1+i)"

= (1 + i)" =

→ (1+i)

$\large \implies i = (\frac{F}{P})^{\frac{1}{n}} - 1$

Plug in the given values we get

10,000 1 i= 6 6, 756.76)

S i = 1.479996 – 1

S i = 1.067522 - 1

S i = 0.067522

i = 6.75%

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