annual rate of compound intrest

Question

When you were ten years old, your parents invested $5,000 for your future. You are now thirty and, with interest compounding quarterly, the initial $5,000 has accumulated to $8,231 over the 20 years. What annual rate of compound interest was used?

Answer 1

8231 = 5000(1 +r/4)^4(20)

(1+r/4) = the 80th root of (8231/5000)

r/4 = -1 + (8231/5000)^(1/80)

r = -4 +4(8231/5000)^(1/80)

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