Math CentralQuandaries & Queries


Subject: Interest yield
Name: Dan
Who are you: Other

What would my rate of compound interest be per month?
Invested $80,000 and in 150 days have increased that amount by $14,300.

Thanks in advance,


Hi Dan.

The formula for compound interest is:

A(t) = P(1+r/m)tm

where A(t) is the amount you have after t years, P is the principal, r is the annual interest rate and m is the number of times per year it is compounded.

You want r.

You asked about "per month" compounding, so 150 days is about 5 months.

94300 = 80000(1 + r/12)5

94300/80000 = (1+r/12)5
(94300/80000)1/5 = 1 + r/12
12( (94300/80000)1/5 -1 ) = r
r = 0.4013

So your interest rate is about 40.13 % annualized.

Stephen La Rocque>

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