QuestionJuly 2, 2025

You currently have 11,167 in your savings account. What interest rate do you need to earn in order to have 20,000 in the account in 10 years? x There is not enough information to solve this question. 8% 10% 6%

You currently have 11,167 in your savings account. What interest rate do you need to earn in order to have 20,000 in the account in 10 years? x There is not enough information to solve this question. 8% 10% 6%
You currently have 11,167 in your savings account. What interest rate do you need to earn in order to have 20,000 in the account in 10 years?
x
There is not enough information to solve this question.
8% 
10% 
6%

Solution
4.6(312 votes)

Answer

6\% Explanation 1. Identify the formula Use the compound interest formula: A = P(1 + r)^t, where A is the future value, P is the present value, r is the annual interest rate, and t is the time in years. 2. Substitute known values 20,000 = 11,167(1 + r)^{10} 3. Solve for r Divide both sides by 11,167: (1 + r)^{10} = \frac{20,000}{11,167} Calculate \frac{20,000}{11,167} \approx 1.791 Take the 10th root: 1 + r = (1.791)^{\frac{1}{10}} Calculate (1.791)^{\frac{1}{10}} \approx 1.06 Subtract 1: r \approx 0.06 4. Convert to percentage r \approx 6\%

Explanation

1. Identify the formula<br /> Use the compound interest formula: $A = P(1 + r)^t$, where $A$ is the future value, $P$ is the present value, $r$ is the annual interest rate, and $t$ is the time in years.<br />2. Substitute known values<br /> $20,000 = 11,167(1 + r)^{10}$<br />3. Solve for $r$<br /> Divide both sides by $11,167$: $(1 + r)^{10} = \frac{20,000}{11,167}$<br /> Calculate $\frac{20,000}{11,167} \approx 1.791$<br /> Take the 10th root: $1 + r = (1.791)^{\frac{1}{10}}$<br /> Calculate $(1.791)^{\frac{1}{10}} \approx 1.06$<br /> Subtract 1: $r \approx 0.06$<br />4. Convert to percentage<br /> $r \approx 6\%$
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