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You have been investing $250 a month for the last 13 years. Today, your investment account is worth $73,262. What is your average rate of return on your investments

Respuesta :

hyderali230

Answer:

Average rate of interest is 6.76% per year

Explanation:

Average rate is the rate of total in interest earned by total amount invested in annual terms.

Number of month = 12 x 13 months = 156 months

Amount of Payment made = 156 x 250 = $39,000

Interest amount = $73,262 - $39,000 = 34,262

Average interest rate = [ ( 34,262 / 39,000 ) x 100 ] / 13 = 6.76% per year

batolisis

Answer:

6.76% average rate of return

Explanation:

simple interest earned  = [tex]\frac{PTR}{100}[/tex]  (equation 1)

P = principal

T = time

Rate = ?

simple interest earned =  total amount - principal

Total amount = $73262

principal = $250 * 12 * 13 = $39000

simple interest earned = $73262 - $39000 = $34262

Time = 13 years

From equation 1 make R the subject of the formula

equation 1 becomes: R = [tex]\frac{simple interest * 100}{PT}[/tex] = ( $34262 * 100 ) / ($39000 * 13)

3426200 / 507000 = 6.7577 %

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