Rounding this answer to the nearest tenth.

[cjp88]

Homework Statement

1. What interest rate is required to turn $1000 into $1500 in 5 years if the
interest is compounded:
a) annually
b) monthly
(round your answer to the nearest tenth of a percent)

Homework Equations

I'm using the formula: (A/P)^1/n - 1 = i (interest)

The Attempt at a Solution

My question here is how am I supposed to answer this with the nearest tenth of a percent because of the answer.

1500/1000 = 1.5
1.5^(1/5) = 1.084471771
1.084471771 – 1 = 0.084471771

This could be 0.1

1500/1000 = 1.5
1.5^(1/60) = 1.006780637
1.006780637 – 1 = 0.006780637

Rounding to the nearest tenth of a percent would give you 0.0

The answers just don't look "right" to me.

 

[HallsofIvy]

Homework Statement

1. What interest rate is required to turn $1000 into $1500 in 5 years if the
interest is compounded:
a) annually
b) monthly
(round your answer to the nearest tenth of a percent)

Homework Equations

I'm using the formula: (A/P)^1/n - 1 = i (interest)

The Attempt at a Solution

My question here is how am I supposed to answer this with the nearest tenth of a percent because of the answer.

1500/1000 = 1.5
1.5^(1/5) = 1.084471771
1.084471771 – 1 = 0.084471771

This could be 0.1

No. Remember that per cent means "per hundred" so a given percent corresponds to a decimal number equal to the percent divided by 100. To go from the percent to the number, multiply by 100. The decimal number is 0.084471771 which rounds, to the nearest 10^th, to 0.1 but the percentage is 8.4471771% which rounds, to the nearest 10^th percent, to 8.4%

1500/1000 = 1.5
1.5^(1/60) = 1.006780637
1.006780637 – 1 = 0.006780637

Rounding to the nearest tenth of a percent would give you 0.0

The answers just don't look "right" to me.

They shouldn't look right! That is 0.6780657% which is, to the nearest 10^th percent, 0.7%.

 

[cjp88]

Blah, I see now. I left it in decimal form not as a percent. Thanks for the help!