Noah currently has an account balance of $2,976.45. He opened the account 11 years ago with a deposit of $1,963.45. If the interest compounds quarterly, what is the interest rate on the account?
Accepted Solution
A:
What we know: Acct. balance A (11)= $2,976.45 Pricipal=$1,963.45 Compounded (n)=quarterly (4) rate=r Compound interest formula: A (t)=p (1+r/n)^nt
What we need toi find: If the interest compounds quarterly, what is the interest rate on the account? Find r. A (t)=p (1+r/n)^nt 2976.45=1963.45 (1+r/4)^(4×11) 2976.45=1963.45 (1+r/4)^44 2976.45/1963.45=1963.45/1963.45 (1+r/4)^44 1.5159=(1+r/4)^44 (1.5159)^(1/44)=((1+r/4)^44)^(1/44)