Question

An account invested in a money market fund grew from $73,377.34 to $73,677,48 in a month What was the interest rate to the nearest tenth? What was the interest rate?

Answer 1

The rate is 4.9%.

Explanation:

The compound interest formula is :

`A=p(1+(r)/(n))^(nt)`

A = 73677.48

p = 73377.34

r = ?

n = 12

t = 1/12

Putting the values in formula we get;

`73677.48=73377.34(1+(r)/(12))^(12*1/12)`

=>
`73677.48=73377.34(1+(r)/(12))^(1)`

=>
`(73677.48)/(73377.34) =(1+(r)/(12))`

=>
`1.004090=((12+r)/(12))`

=>
`12.04908=12+r`

=>
`r = 12.04908-12`

r = 0.04908

or r = 4.9%

Therefore, the interest rate is 4.9%.