Question

Mariam is going to invest $3,000 and leave it in an account for 13 years. Assuming the interest is compounded monthly, what interest rate, to the nearest hundredth of a percent, would be required in order for Mariam to end up with $6,200?

Answer 1

8.21%

Explanation:

r = (1/t)(A/P - 1)

t = 13

A = 6200

P = 3000

1 6200

r = (-------) ((------------) - 1))

13 3000

1 31

r = (-------) ( ------ - 1)

13 15

1 16

r = (-------) ( ------ )

13 15

16

r = -------- = 0.0820512

195

r = 0.0820512 x 100 = 8.20512

r ≈ 8.21%

I hope this helps!

Answer 2

Explanation:

Compounded Monthly:

Use A=P(1+r/n)^nt

A=6200

P=3000

t=13

n=12

​

Plug in and simplify:

1. Multiply 12 times 13

2. Divide out the 3000

3. Raise both sides to the 1/156 power to cancel out the exponent

4. Subtract 1 from both sides

5. Multiply by 12 on both sides

R should equal 0.0559716

That is about 5.60%

5.60%