An account is opened with an initial deposit of $6500 and 20years later it is wo

Question

An account is opened with an initial deposit of $6500 and 20years later it is worth $10,000. If the interest was compounded monthly, what was the annual interest rate on the account? In the year 1985, a house was values at $110,000. By the year 2005, the value had appreciated to $145,000. What was the annual growth rate between 1985 and 2005? Assume that the value of the house continued to grow by the same percentage. What was the value of the house in the year 2010? Graph the following graphs on the same axes: f(x) = 3(1/4)^x,

Explanation / Answer

Principal,P=6500

Time,t=20years

n=12

Amount,a=$10000

Rate of interest,r=?

A=P(1+r/n)nt

10000=6500(1+r/12)240

(20/13)1/240= 1+r/12

r=.02156=2.156%

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