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# Finding interest rate compounded annually watch

1. Hi!

I am studying corporate finance and could not find in the book how to determine interest rate needed to get x amount of money.

For instance, GE paid 2.45 billion dividends in 2012, and then it paid 3.68 billion in 2014.

Over these two years, what is the annual growth rate?

I suppose the formula might look like this?

2.45 x (1+x%)(1+x%) = 3.68

How do I find 'x'?
---

Thank you for the help!

Kind regards,
Paul.
2. (Original post by Kinlejus)
Hi!

I am studying corporate finance and could not find in the book how to determine interest rate needed to get x amount of money.

For instance, GE paid 2.45 billion dividends in 2012, and then it paid 3.68 billion in 2014.

Over these two years, what is the annual growth rate?

I suppose the formula might look like this?

2.45 x (1+x%)(1+x%) = 3.68

How do I find 'x'?
---

Thank you for the help!

Kind regards,
Paul.
This is just algebraic manipulation - divide by 2.45, take the square root and subtract 1, giving x = SQRT(3.68/2.45) - 1
3. Hi Illusionary,

thank you!

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