The amount of money in a bank account that is compounded yearly can be represented by the function A (y) = P (1 + r) y, where P is the amount initially deposited, r is the annual interest rate expressed as a decimal, and y is the number of years that have passed since the initial deposit. $2,700 was deposited 14 years ago into a bank account that is compounded yearly, and no additional deposits or withdrawals have been made. If the amount of money now in the bank account is $7,930.42, what is the annual interest rate?

Question

Heidy Keith

30 January, 16:35

+5

Answers (1)

Know the Answer?

Natalee Bernard · Answer 1

R = (7,930.42:2,700) ^ (1:14)) - 1

R=0.08*100=8%