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18 March, 03:41

If $4200 is invested in a savings account for which interest is compounded semiannually, and if the $4200 turns into $4900 in 4 years, what is the interest rate of the savings account?

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  1. 18 March, 07:27
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    4900=4200 (1+r/2) ^ (2*4)

    Solve for r

    R = (4900/4200) ^ (1/8)) - 1) * 2

    R = ((4,900:4,200) ^ (1:8) - 1) * 2

    R=0.039*100=3.9%
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