Question

Alex invests ?4000 for 7 years. His investment pays compound interest of x% per annum. At the end of the 7 years Alex's investment is worth ?5263.73 Work out the value of x

Answer 1

Answer:

x=4

Step-by-step explanation:

Answer 2

Answer:

The value of x is 4%

Step-by-step explanation:

Given principal amount = 4000

                            Time   = 7 years

        Future amount      = 5,263.73

Rate of interest              = x

Formula for compound interest

$A=P(1+\frac{r}{n})^{nt}$

Now put the values in the formula

$5,263.73=4000(1+\frac{x}{1})^{1\times 7}$

$5,263.73=4000(1+\frac{x}{1})^{7}$

$5,263.73=4000(1+x)^{7}$

$\frac{5263.70}{4000}=(1+x)^7$

$1.3159=(1+x)^7$

$(1.3159)^{\frac{1}{7}}=1+x$

$x=(1.3159)^{\frac{1}{7}}-1$

x = 1.04 - 1

x = 0.04 or 4%

The value of x is 4%