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11 June, 12:50

Suppose you are planning to deposit $3,000 in a bank account. You'd like your deposit to grow to $6,000 in 2 years. If interest in the account compounds weekly, what annual interest rate do you need?

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  1. 11 June, 13:10
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    The annual interest rate do you need is 34.77%

    Explanation:

    for: A is the future value

    P is the present value

    r is the rate of interest

    n is the time period.

    Then, the annual interest can be found by:

    A = P (1 + r/52) ^ (52*n)

    6000 = 3000 * (1 + r/52) ^ (52*2)

    (6000/3000) ^ (1/104) = (1 + r/52)

    (1 + r/52) = 1.006687136

    r = (1.006687136 - 1) * 52

    = 34.77%

    Therefore, The annual interest rate do you need is 34.77%
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