Your 9000 investment grows to 15200 over the course of 4 yea

Your $9000 investment grows to $15200 over the course of 4 years compounded quarterly. What interest rate did you receive on your investment? (Write your answer with at least four decimal points) Your interest rate is r =|

Solution

investment = $9000

grows to $ 15,200

time = 4 years compounded quarterly

applying compound interest formula

A = P ( 1+r/n)^nt

n = 4 for quareterly compounding

plugging the values in the formula we get

15200 = 9000 ( 1 + r/4)^16

dividing both sides by 9000

1.688 = ( 1 + r/4) ^16

taking natural log on both sides

ln 1.688 = 16 ln ( 1+ r/4)

.5240 = 16 ln ( 1+r/4)

dividing both sides by 16

.03275 = ln ( 1+r/4)

e^.03275 = 1+r/4

1.0332 -1 = r/4

r = .1332

rate of interest = 13.32 %