Question

What annual interest rate, to the nearest tenth, would be needed for $3500 to

increase to $8780 over 10 years?

Answer 1

r ≈ 9.6%

Explanation:

Simple Interest Rate Formula: A = P(1 + r)^t

Simply plug in our known variables a, p, and t and solve for r:

8780 = 3500(1 + r)¹⁰

8780/3500 = (1 + r)¹⁰

`\sqrt[10]{(439)/(175) }=1+r`

`r = \sqrt[10]{(439)/(175) }-1`

r = 0.096333

Convert r into %:

9.6%