sylvain wants to have $5000 in 15 years. right now he has $2000. find the compound interest rate (accurate to the nearest tenth)he needs by using the spreadsheet chart you created in the lesson.

a. change the principal of the investment to 2000.

b.Guess an interest rate, and enter it into the spreadsheet
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I don’t have the charts the question refers to, but here’s how you work out the answer.

Your principal is $2000 and you want to grow it to $5000 in 15 years. So the growth you want is 5000/2000=2.5. To find the interest rate that would give you the amount you want you need to take the 15th root of 2.5, assuming interest is compounded annually—just once a year. You will need a calculator to do this. It comes to about 1.063. Now subtract 1, to get 0.063 then multiply by 100, to get 6.3%. That’s the compound interest rate you need.

The chart above shows interest rates on the horizontal axis up to about 9%. The curves are colour-coded according to the number of years: red=5 yrs, blue=10 yrs, green=15 yrs, purple=20 yrs, black=25 yrs. You want the green curve. And the growth value is 5000/2000=2.5. You can see that when growth=2.5 on the green line, the corresponding rate is about 6.3%.

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