Question

Jon has $5,000 to invest in a savings account that has interest compounded annually. If he wants his money to double in eight years, what percent must the interest rate be on the account?

Answer 1

Answer:

Rate=9.05%

Step-by-step explanation:

Let P represent the Principal ,t the time = 8 years and r be the rate of interest.

It is given money doubles in 8 years so A=2P.

The compound interest is given by the formula :

$A= P(1+r^{)t}$

Substituting the values we have:

$2P=P( 1+r^){8}$

Dividing both sides by P :

$2=(1+r)^{8}$

$2^{\frac{1}{8} } =1+r$

1.0905-1=r

r=0.09050

r=9.05%

Answer 2

Your answer will be ........9