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What interest rate would be necessary to obtain $5,500 in 7 years if $4,000 is the amount of the original investment and the interest is compounded yearly?.

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Sandlee09idn

Given what we know, we can confirm that the interest rate necessary to reach $5500 in 7 years with a starting investment of $4000 on a yearly compounded interest, would be 4.7%.

Why is this the required interest rate?

Since the question did not specify any extra data to be taken into account, such as:

  • Interest variance
  • Monthly or yearly contributions
  • Inflation rates

and so on, we can assume that all of these values are null. Therefore, if we take $4000 and add 4.7%, and repeat that every time using our new totals, after 7 repetitions we are left with close to $5500, which is our goal.

Therefore, we can confirm that the interest rate necessary to reach $5500 in 7 years with a starting investment of $4000 on a yearly compounded interest, would be 4.7%.

To learn more about interest rates visit:

https://brainly.com/question/4626564?referrer=searchResults

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