finance

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If jim wants to accumulatw $13,217.74 in 2 years. currently has $10,477.03 to invest. what interest rate must he earn on the investment if he deposits $10,477.03 today to have $13,217.74 exactly 2 years from today?

  • finance -

    I like this question :-)

    Let's assume interest is compounded annually.

    After one year, the value will be 10,477.03 * x, where x is 1 + (interest rate implicitly divided by 100).

    After two years, it will be
    10,477.03 * x * x, because we increase it by the same percent again. And we want that to be 13,217.74

    So
    10477.03 * x * x = 13217.74
    x^2 = 13217.74/10477.03
    and your calculator will take it from there.

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