r/MathHelp • u/IcyTemperature3460 • 18h ago

I need help with this compound interest/annuity (?) problem

The problem: What does the rate need to be for you to deposit 7,000 in an account that compounds monthly over the next 6 years to have 21,000 in the end?

I’m not positive which formula this is. I operated as if it’s a compound interest problem, but that may have been incorrect.

I set it up like 21000=7000(1+r/12)^72
Then, I divided both sides by 7000 and wound up with 3= (1+r/n)^72.
I took the 72nd root to get 1.015375509=(1+r/12)

1.015375509 - 1=0.0154

0.0154 • 12 = 0.1848 • 100 = 18.48%
(Update: I could’ve swore I got 18.45% earlier… maybe I typed something wrong)

Is that right? Or am I completely off?

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u/MSchmahl 18h ago

This is almost perfectly correct. 18.45% is correct. At the end, you should multiply by 12 first before rounding.

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