You invest $9,000.00 today. In 7 year's time, you expect the investment to grow to $15,500.00.What is the rate of return on your investment (in percent per annum)?Round your answer to 2 decimal places. E.g. if the answer is 5.8312%, please type 5.83 in the answer box (do not type the percentage sign).
Question
You invest 15,500.00.What is the rate of return on your investment (in percent per annum)?Round your answer to 2 decimal places. E.g. if the answer is 5.8312%, please type 5.83 in the answer box (do not type the percentage sign).
Solution
To calculate the rate of return on your investment, we can use the formula for compound interest and solve for r (rate):
A = P (1 + r)^t
where: A = the amount of money accumulated after n years, including interest. P = principal amount (the initial amount of money) r = annual interest rate (in decimal) t = time the money is invested for in years
Given: A = 9,000 t = 7 years
Substituting these values into the formula and solving for r:
9,000 (1 + r)^7
Divide both
Similar Questions
Fill in the Blank QuestionFill in the blank question.If you invested $5,000 four years ago and today the value of that money is $5,800, the rate of return for the entire period would be %.
An investor has accumulated $6,900 and is looking for the best rate of return that can be earned over the next year. A bank savings account will pay 5%. A one-year bank certificate of deposit will pay 7%, but the minimum investment is $9,900.Required:Calculate the amount of return the investor would earn if the $6,900 were invested for one year at 5%.Calculate the net amount of return the investor would earn if $3,000 were borrowed at a cost of 15%, and then $9,900 were invested for one year at 7%.Calculate the net rate of return on the investment of $6,900 if the investor accepts the strategy of part b
A company invests $38,900 and receives net cash inflow of $10,000 each year for five years. What is the internal rate of return?Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer.a5%b7%c9%d11%
. A year ago, you invested $12,000 in an investment that produced a return of 16%. What is yourapproximate annual real rate of return if the rate of inflation was 2% over the year?A. 18%.B. 2%.C. 16%.D. 15%.E. none of the above
Calculate the Rate of Return on an initial investment of $6,000 valued at $6,500. Responses8.3%8.3%6.5%6.5%4.3%4.3%9.5%
Upgrade your grade with Knowee
Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.