Getting Started: Computing Compound Interest

At what annual interest rate, compounded monthly, will 1,250 accumulate to 2,000 in 7 years?

Note: Because there are no payments when you solve compound interest problems, PMT must be set to 0 and P/Y must be set to 1.

1. Press Π[enter] to select 1:Finance from the APPLICATIONS menu.
2. Press [enter] to select 1:TVM Solver from the CALC VARS menu. The TVM Solver is displayed. 3. Enter the data: N=7 PV= M1250 PMT=0 FV=2000 P/Y=1 C/Y=12
4. Move the cursor to æ and press ƒ \. You need to look for an interest rate of 6.73% to grow 1250 to 2000 in 7 years.