Benjamin Franklin, according to the American Bankers Association, left $5,000 to the residents of Boston in...

 

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Benjamin Franklin, according to the American Bankers Association, left $5,000 to the residents of Boston in 1791, with the understanding that it should be allowed to accumulate for a hundred years. By 1891 the $5,000 had grown to $322,000. A school was built, and $92,000 was set aside for a second hundred years of growth. In 1960, this second century fund had reached $1,400,000. As Franklin put it, in anticipation: "Money makes money and the money that money makes, makes more money." Question: What average interest rate per year was earned from 1791 to 1891? Benjamin Franklin, according to the American Bankers Association, left $5,000 to the residents of Boston in 1791, with the understanding that it should be allowed to accumulate for a hundred years. By 1891 the $5,000 had grown to $322,000. A school was built, and $92,000 was set aside for a second hundred years of growth. In 1960, this second century fund had reached $1,400,000. As Franklin put it, in anticipation: "Money makes money and the money that money makes, makes more money." Question: What average interest rate per year was earned from 1791 to 1891?

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Solution Given In 1791 5000 was accumulated In 1891 The accumulated 5000 had grown t... View the full answer