Problema Solution
If P dollars are deposited in an account that pays an annual rate of interest r, then in n years, the amount of money A = P(1 + r)n. A savings account was opened on January 3, 1992, with a deposit of $9,651 and closed on January 2, 1994, with an ending balance of $11,355. Find the rate of interest.
Answer provided by our tutors
n = 2 years
P = $9,651
A = $11,355
r = ?
A = P(1 + r)^n
P(1 + r)^n = A
9651(1 + r)^2 = 11355
r = 0.0847 or 8.47%
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the rate of interest is 8.47%.