Question

At what annual interest rate would $500 grow $1,948.00 in 12 years ? write your answer to the nearest whole number.

Answer 1

Okay, here we have this:

Considering the provided information, we are going to replace in the Compound Interest Formula, so we obtain the following:

`\begin{gathered} r=n(((A)/(P))^{(1)/(nt)}-1) \\ r=1(((1948)/(500))^{(1)/(1\cdot12)}-1) \\ r=1(((1948)/(500))^{(1)/(12)}-1) \\ r=\frac{1948^{(1)/(12)}}{500^{(1)/(12)}}^{}-1 \\ r\approx12\text{ percent} \end{gathered}`

Finally we obtain that the annual interest rate is approximately 12%.