find the interest rate needed

Calculus
Tutor: None Selected Time limit: 1 Day

Jul 9th, 2015

Thank you for the opportunity to help you with your question!

 Amount A = P (1 + r/1200)^36

where P = Principal r = rate n = months

Hence 7000 = 4000(1 + r/1200)^36

or (1 + r/100)^36 = 7000/4000 = 1.75

Taking logs

36 log (1 + r/1200) = log 1.75

hence log (1 + r /1200)= ( log 1.75)/36

= 0.0067510569

1 + r /1200 = e ^ 0.0067510569

and you get r

Please let me know if you need any clarification. I'm always happy to answer your questions.
Jul 9th, 2015

I am unclear as to what the answer is 

Jul 9th, 2015

Sorry the last part should be 

 1 + r /1200 = 10 ^ 0.0067510569

1 + r /1200 =1.01566633317

r/1200 = .01566633317

r = 18.8%


Jul 9th, 2015

I have taken logs (base 10)

could also use natural logs

Jul 9th, 2015

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