According to the compound interest model, we find the following results: I) x ≈ 11.5 yr, C' = $ 101317.36, II) r ≈ 7.4 %, x ≈ 9.8 yr, III) C = $ 7626.38, x ≈ 8.6 yr, IV) r ≈ 6.5 %, C = $ 12801.61
How to determined all the variables associated with compound interest
Compound interest describes the capital gain in term of deposited capital and the consideration that such capital is increased continuously in time. The compound interest model is shown below:
C' = C · (1 + r/100)ˣ (1)
Where:
- C - Initial capital
- C' - Current capital
- r - Interest rate, in percentage.
- t - Time, in years
The doubling time (x) is the period needed for a capital to be doubled. It is described by the following expression based on (1):
x = (㏒ 2)/[㏒ (1 + r/100)] (2)
Now we proceed to calculate each missing variable:
Case I - Doubling time
x = (㏒ 2)/[㏒ (1 + 6.2/100)]
x ≈ 11.5
Case I - Current capital
C' = 75000 · (1 + 6.2/100)⁵
C' = 101317.36
Case II - Interest rate
[tex]r = 100\cdot \left(\sqrt [5] {\frac{7130.90}{5000} }-1\right)[/tex]
r ≈ 7.4
Case II - Doubling time
x = (㏒ 2)/[㏒ (1 + 7.3/100)]
x ≈ 9.8
Case III - Initial capital
C = 11414.71/(1 + 8.4/100)⁵
C = 7626.38
Case III - Doubling time
x = (㏒ 2)/[㏒ (1 + 8.4/100)]
x ≈ 8.6
Case IV - Interest rate
[tex]r = 100\cdot \left(\sqrt [11] {2 }-1\right)[/tex]
r ≈ 6.5
Case IV - Initial capital
C = 17539.32/(1 + 6.5/100)⁵
C = 12801.61
To learn more on compound interest: https://brainly.com/question/14295570
#SPJ1
