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Gavin owes the bank $63,000. After 10 years, Gavin owes $93,255. Gavin knows the debt grows with an interest rate that compounds once every year. What is the rate of interest (as a percentage)?

1 Answer

6 votes

Answer:

1,616.60

we know that

The compound interest formula is equal to

where

A is the Final Investment Value

P is the Principal amount of money to be invested

r is the rate of interest in decimal

t is Number of Time Periods

n is the number of times interest is compounded per year

in this problem we have

substitute in the formula above

Explanation:

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