Question

1) You have an investment account that started with $3,000 10 years ago and which now has grown to ​$11,000.

a. What annual rate of return have you earned​ (you have made no additional contributions to the​ account)?

b. If the savings bond earns 16% per year from now​ on, what will the​ account's value be 10 years from​ now?

Answer 1

a)
	FV= PV*(1+r)^n
	Where,
	FV= Future Value
	PV = Present Value
	r = Interest rate
	n= periods in number
	$11000= $3000*( 1+r)^10
	11000/3000 =(1+r)^10
	3.66667 =(1+r)^10
	r =13.87%
	Annual rate =13.87%
b)	FV= PV*(1+r)^n
	Where,
	FV= Future Value
	PV = Present Value
	r = Interest rate
	n= periods in number
	= $11000*( 1+0.16)^10
	=11000*4.41144
	= $48525.79