Question

Suppose that $2060 is deposited into an account where the interest is compounded annually. This situationcan be modeled by the function.P(t) = 2060(1.019)where P(t) represent the value (in dollars) of the account at t years afterdepositing the $2060.According to this model, what is the earning interest rate in percent?

Answer 1

Notice that:

`1.019=1+0.019,`

therefore, the interest rate is

`0.019`

which in percent corresponds to:

`0.019*100=1.9\%.`

Answer:

`1.9\%`