What annual interest rate would you need to be earning, in order for $10,000 to

Question

What annual interest rate would you need to be earning, in order for $10,000 to grow to $20,000 in exactly 5 years? What monthly periodic rate would you need to earn in order to be equivalent with this annual interest rate? What annual interest rate would you need to be earning, in order for $10,000 to grow to $20,000 in exactly 5 years? What monthly periodic rate would you need to earn in order to be equivalent with this annual interest rate? What annual interest rate would you need to be earning, in order for $10,000 to grow to $20,000 in exactly 5 years? What monthly periodic rate would you need to earn in order to be equivalent with this annual interest rate?

Explanation / Answer

A1 = 10000 A2 = 20000 Term 5 years Interest Rate?

A = P(1+r/100) to the power of 5 (years)

20000 = 10000 (1+r/100}*5

5th root of 2 = [1+r/100]

1.1487 = [1+r/100]

r/100 = 0.1486

r = 14.87% per annum

Monthly periodic rate is equal to 14.87/12 = 1.239%

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