= (4500/2400) ^ (1/4) - 1
= 0.17017366 or about 17.02%
Take the 4th-root of each side.
1.875^(1/4) = 1 + i
Stanley Roper has $2,400 that he is looking to invest. His brother approached him with an investment opportunity that could give Patrick $4,500 in 4 years. What interest rate would the investment have to yield in order for Stanley’s brother to deliver on his promise?
investment today= PV= 2400
amount to be received= FV=4500
time of investment= 4 years
returns on investment= i
FV= PV(1+i)^n
4500=2400(1+i)^4
4500/2400=(1+i)^4
1.88=(1+i)^4
I don't know what to do here... Help please
