Question

You have $1000 to invest in an account and need to have $2000 in one year. What interest rate would you need to have in order to have this if the amount is compounded weekly? Round your answer to the nearest percent.

Answer 1

Answer:

69.8%

Step-by-step explanation:

The weekly interest rate is computed using 52 weeks a year as per standard investment practice.

FV=PV*(1+r/52)^n*52

FV is the future value of $2000

PV is the present worth of $1,000

r is the unknown

n is the number of years which is 1

2000=1000*(1+r/52)^1*52

divide both sides by 1000

2000/1000=(1+r/52)^52

divide the index of the both sides by 52

(2000/1000)^(1/52)=1+r/52

1.013418991 =1+r/52

r/52=1.013418991 -1

r/52=0.013418991

r=0.013418991 *52=69.8%