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Maria deposited $500.00 into a new savings account that earns interest compounded monthly. After 4 years, the balance in the account was $531.00. What was the interest rate on the account?

User Payman
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Answer:


500( {1 + (r)/(12)) }^(48) = 531


{(1 + (r)/(12) )}^(48) = (531)/(500)


1 + (r)/(12) = \sqrt[48]{ (531)/(500) }


(r)/(12) = \sqrt[48]{ (531)/(500) } - 1


r = 12( \sqrt[48]{ (531)/(500) } - 1) = .015 = 1.5\%

The interest rate is 1.5% compounded monthly.

User Brittnee
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