You currently have $100 available to invest for a 21 year period. At what interest rate must you invest this amount in order for it to be worth $500 at maturity?

Question

Quizplus · Accepted Answer

r can be solved by one of two ways: Take the nth root of both sides of the equation: Use a financial calculator; Take the nth root of both sides of the equation 100 x(1+r)²¹ = 500 (1+r)²¹ = 500/100 = 5 (1+r)²¹ ^{x 1/21} = 5 ^1/21 1+r = 1.0797 r = 7.97%

You Currently Have $100 Available to Invest for a 21