Question

If $4200 is invested into 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?

A. 3.89%
B. 7.86%
C. 16.02%
D. 1.29%

Answer 1

Hello,

4900 = 4200(1+x/2)^8

x = 0.0389 = 3.89%

Hope this helps

Answer 2

x = interest rate

solve for x

4900 = 4200(1+x/2)^8

x = 0.0389 = 3.89%