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Consumer Mathematics - Compound Interest (Posted on 2006-10-04) Difficulty: 2 of 5
A boy invests a sum of $4000 on his 10th birthday in the year 1996, with an annual interest rate of 7%, compounded every six months. During some stage of the investment, the interest rate changes to an annual rate of 6%, still compounded every six months. On the boy's 18th birthday, the boy checks his account to see a sum of $6770. At what point in time did the interest rate change from 7% to 6%?

No Solution Yet Submitted by Chris, PhD    
Rating: 3.7500 (4 votes)

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re: analytic solution | Comment 3 of 5 |
(In reply to analytic solution by Charlie)

I stand corrected.  My data was correct. My analysis wasn't.  Age 15.5 looks good for the time of the rate decrease.
  Posted by Leming on 2006-10-04 12:20:54

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