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AleksandrR
1 month ago
6

When Rahul began 7th grade, he put his savings of $3,000 in an account that compounded interest annually. He hoped to have $6,00

0 by the time he graduates high school in six years. What interest rate is required for him to reach his goal?
History
2 answers:
BigorU [1.6K]1 month ago
6 0
An annual interest rate of 12 percent is necessary.
marta [1.5K]1 month ago
4 0

The equation for calculating annual compound interest is:

A = P (1 + r/n)ⁿˣ

In this equation:

A = Future value

P = Initial investment amount

r = Annual interest rate

n = Frequency of interest compounding per year

x = Duration in years


A = $6,000

P = $3,000

r =?

n = 1 time

x = 6 years.


6000 = 3000 × (1 + r)⁶


6000/3000 = (1 + r)⁶


2 = (1 + r)⁶


Taking the sixth root of both sides.


1.12 = 1 + r


r = 1.12 - 1


r = 0.12


r = 12%

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