Final answer:
The interest rate is approximately 2.9%.
Step-by-step explanation:
To find the interest rate, we can use the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
- A is the final amount after t years
- P is the initial investment
- r is the interest rate
- n is the number of times the interest is compounded per year
- t is the number of years
In this case, we have:
- P = $10,000
- A = $11,273
- n = 12 (compounded monthly)
- t = 4 years
Substituting these values into the formula, we get:
$11,273 = $10,000(1 + r/12)^(12*4)
Solving for r:
r = 12[(11,273/10,000)^(1/48) - 1]
Using a calculator, we find that r is approximately 2.9%.