Assume Sheryl Jenkins wants to accumulate $ 13,241.39 in two years. She currently has $ 10,621.36 to invest. What interest rate must she earn on her investment (that is, if she deposits $ 10,621.36 today) to have $ 13,241.39 exactly two years from today?

11.65%

Explanation:

The $13,241.39 is a future value amount as it is what is to be accumulated in 2 years.

Future value formula therefore applies:

Future value = Current value * ( 1 + interest rate) ^ no. of years

13,241.39 = 10,621.36 * ( 1 + i) ²

(1 + i)² = 13,241.39 / 10,621.36

(1 + i)² = 1.24667556697

1 + i = √1.24667556697

i = 1.116546267 - 1

i = 11.65%

month 1 start amount =$3287.90 interest=(3287.90x0.0145/12)3.97 total to pay=$3291.81 paid =$1200 balance =$2,091.87

month 2 starting amount= $2,091.87 interest =$25.28 total to pay =$2117.15 paid =$1200 balance $917.15

month 3 starting amount =$917.15 interest =$11.08 total to pay =$928.23 paid =$928.23 balance =$0 total to pay 1200+1200+928.23 = $3328.23 it will take 3 months to pay a total of $3328.23

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