these numbers at the end of year 3 equal to $2,393?
Yr. 1 = $500; Yr. 2 = $750; Yr. 3 = $1,000
Please help!
2007-11-13 08:59:02 · 2 answers · asked by Elena 2 in Business & Finance ➔ Credit
In each case make the Interest rate = "X" (the unknown) .. then write a Formula and solve for X
To help you here is the first one (it's the most difficult) .. below I assume Interest is annual (once a year) and is only calculated and added at the end of each year.
You start with 500 in year 1.
At end Yr. 1 you have yr1 starting 500 PLUS the Interest on 500 (i.e. X times 500) .. this comes to (1 + X) times 500
So yr2 start = 500 * (1+X)
At end of year 2 you have yr2 start [500 * (1+X)] times another (1+X)
So yr 3 start = 500 * (1+X) * (1+X)
At end of year 3 you have yr3 start * (1+X)
End yr3 is 500 * (1+X) * (1+X) * (1+X)
If end yr 3 = 2393 ... then the formula is ....
2393 = 500 * (1+X) * (1+X) * (1+X)
Solve for X.
2007-11-13 19:10:35 · answer #1 · answered by Steve B 7 · 0⤊ 0⤋
Do your own homework.
2007-11-13 09:10:21 · answer #2 · answered by ? 7 · 2⤊ 7⤋