An account had an initial deposit made and then interest was applied once a year at a fixed rate. The amount of money, in dollars, in the account after t years, was 103 (1.02) t. What was the annual interest rate?

.02%

.03%

2%

3%

Question

Mathematics

Joe Humphrey

31 May, 14:13

An account had an initial deposit made and then interest was applied once a year at a fixed rate. The amount of money, in dollars, in the account after t years, was 103 (1.02) t. What was the annual interest rate?

.02%

.03%

2%

3%

+2

Answers (1)

Know the Answer?

Tess · Answer 1

Answer would be 2%

after 1 year = 103 x 1.02 = 105.06

after 2 years = 103 x 1.02 x1.02 = 107.16

and so on as compound interest, ie interest on top of interest already paid.

An account had an initial deposit made and then interest was applied once a year at a fixed rate. The amount of money, in dollars, in the account after t years, was 103 (1.02) t. What was the annual interest rate?.02%.03%2%3%

An account had an initial deposit made and then interest was applied once a year at a fixed rate. The amount of money, in dollars, in the account after t years, was 103 (1.02) t. What was the annual interest rate?

.02%

.03%

2%

3%