Question

Mrs. Emily Francis saves RM10 000 in a bank . by the end of the eighth year , the money collected amounts to RM19 992.71.if the bank pays an annual interest of x% for a year and is compounded every 6months , calculate the value of x​

Answer 1

8.85% per year

Explanation:

To find the interest rate of a compounding interest, we use the formula:

`r=n[((A)/(P))^{(1)/(nt)}-1]`

Before we start solving, let's break down all the variables that we have.

A = 19,992.71

P = 10,000.00

n = 2

t = 8

r = ?

Now let's put the values into the formula.

`r=2[((19,992.71)/(10,000.00))^{(1)/(2(8))}-1]`

`r=2[((19,992.71)/(10,000.00))^{(1)/(16)}-1]`

`r=2[((19,992.71)/(10,000.00))^(0.0625)-1]`

`r=2[(1.9992.1)^(0.0625)-1]`

`r=2[1.0442499885-1]`

`r=2[0.0442499885]`

`r=0.08849997699` or
`8.85%`

So the rate the Mrs. Emily Francis got from the bank was 8.85% per year.