Question

where r is written as a decimal. What is the formula for the interest rate, r; required to achieve a balance of B in the account after 3 years?

Answer 1

Option b

r = -1 + (∛B/10)

Explanation:

Given in the question that formula to calculate future amount B, after 3 years if principal amount 1000 is deposit with interest rate r is

B = 1000(1+r)^3

B/1000 = (1+r)^3

∛(B/1000) = 1 + r

∛B/∛1000 = 1 + r

∛B/10 = 1 + r

(∛B/10) - 1 = r

r = -1 + (∛B/10)

So formula to calculate interest rate, r is = -1 + (∛B/10)