Tracy invested in a share of stocks with an annual interest rate of 3%. The following expression represents the value of the stock after n years. Find the approximate interest rate over 7 years.

60 (1.03) ^n

?

- 23%

- 21%

- 15%

- 19%

?

The value of the stock after the end of years would be:

v=60 (1.03) ^n

v (7) = 60 (1.03) ^7

v (7) = 73.80

therefore the rate of interest of the stock in 7 years will be given as follows:

current value of the stock is given by:

C=e^ (-r) V

but C=60

v=73.80

hence:

60=e^ (-r) * 73.80

60/73.70=e^-r

0.8131=e^-r

introducing natural logs we get:

ln 0.8131=-r

-0.2069=-r

hence:

r=0.2069=0.21=21%

the answer is 21%