Mr Tan invested $5000 in an endowment fund for
5 years. The fund pays an interest compounded
yearly. At the end of 5 years, he received a total of
$5800. Find the interest rate.

Compound Interest Formula Solved For Rate:

log (1 + rate) = {log(total) -log(Principal)} ÷ Years

log (1 + rate) = {log(5,800) -log(5,000)} ÷ 5

log (1 + rate) = [3.7634279936 -3.6989700043] / 5

log (1 + rate) = 0.0644579893  / 5

log (1 + rate) = 0.0128915979

Then we raise 10 to the power of 0.0128915979  which equals

1.0301289629  = 1 + rate

Therefore, rate = .0301289629  and we multiply by 100 to make a percentage:

3.01289629 %

Source: https://1728.org/compint2.htm

https://1728.org/compint.htm

Step-by-step explanation:

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