2. June Cunningham deposited $54,200 in the bank on January 1, 2006. On January 2, 2016, this deposit has accumulated to $106,611. Interest is compounded annually on the account. What rate of interest did June earn on the deposit

Interest rate = 4.61%

Explanation:

The future value of an investment is the accumulated sum (principal plus interest) after being invested at a particular rate for certain period of time.

FV = PV * (1+r) ^ (n)

FV = Future Value - 106,611

PV = Present Value - $54,200

r - interest rate-?

n - 15 years

So substituting into the formula, we have

106,611 = 54,200 * (1+r) ^15 =

(1+r) ^15 = 106,611/54200

(1+r) ^15 = 1.96699262/15

find the log of both sides

15 log (1+R) = log 1.9669

Log 1+r = log 1.9669/15

Log 1+r = 0.019586849

finding the log inverse

1+r = 1.046132872

r = 1.046132872 - 1

= 4.61%