Question

Claire deposited $2,500 into an account that accrues interest monthly. She made no additional deposits or withdrawals. After 2 years, Claire had $2,762.35 in the account. What is the annual interest rate of the account?

Answer 1

A

Step-by-step explanation:

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Answer 2

The annual interest rate is 5.247%. Subtract $2,500.00 from $2,762.35 and you get 262.35- the 2-year interest. To get the annual interest, divide 262.35 by 2, which equals 131.75. Then, divide 131.75 by 2,500 (original amount) and you get 0.05247. Lastly, multiply 0.05247 by 100 to get the answer (5.247%).