Problema Solution
Suppose a deposit of $3,000 in a savings account that paid an annual interest rate r (compounded yearly) is worth $3,456 after 2 years. Using the formula A=P(l+r)^t, we have 3,456=3,000(l+r)^2
Solve for r to find the annual interest rate.
Answer provided by our tutors
3456=3000(1+r)^2
3000(1+r)^2 = 3456 divide both sides by 3000
(1+r)^2 = 3456/3000
by solving we find
r = 0.0733 or 7.33%
click here to see the step by step solution of the equation
the annual interest rate is 7.33%.