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Kirk Van​ Houten, who has been married for 21 ​years, would like to buy his wife an expensive diamond ring with a platinum setting on their​ 30-year wedding anniversary. Assume that the cost of the ring will be ​$10 comma 000 in 9 years. Kirk currently has ​$4 comma 469 to invest. What annual rate of return must Kirk earn on his investment to accumulate enough money to pay for the​ ring? The annual rate of return Kirk must earn on his investment to accumulate enough money to pay for the ring is_________

Respuesta :

TomShelby

Answer:

Kirk will require returns of 9.36% per annum to get their 10,000 dolllars in 9 years

Explanation:

We need to sovle for the annual rate which makes a future value of 10,000 out of 4,469 after 9 years:

[tex]Principal \: (1+ r)^{time} = Amount[/tex]

Principal 4,469.00

time 9.00

Amount

[tex]4469 \: (1+ r)^{9} = 10,000.00[/tex]

[tex]r = \sqrt[9]{10,000/4,469} -1[/tex]

rate 0.093617664 = 9.36%

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