Question

castel invests $7178 in a savings account with monthly compounding. after 7 years, the balance reaches $12,543.00. What is the interest rate of the account?

Answer 1

r = 129.1 %

Explanation:

Using the compounding formula:

A = P (1 + r/t)^nt

$12, 543 = $7178 (1 + r/12)^12(7)

-7178

$5365 = (1 + r/12)^84

`\sqrt[84]{5365}` =
`\sqrt[84]{(1 +(r)/(12))^(84)}`

1.107642572 = 1 + r/12

(0.108 = r/12) (12)

r = 1.2917 = 129.1 %

Answer 2

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