Question

Carlos deposited $7,924 into a savings account 30 years ago. The account has an interest rate of 4.6% and the balance is currently $30,541.83. How often does the interest compound? Answer daily annually quarterly monthly

Answer 1

• annually

Explanation:

Given

• Deposit = $7924
• Time = 30 years
• Interest rate = 4.6% compound
• Balance = $30541.83
• Compound number= x

Solution

• 30541.83=7924*(1.046)^(30x)
• (1.046)^(30x) = 30541.83/7924
• 1.046)^(30x) = 3.85434502776
• log (1.046)^(30x) = log 3.85434502776
• 30x log 1.046 = log 3.85434502776
• 30x = log 3.85434502776 /log 1.046
• 30x = 30
• x = 1, once per year

Answer is annually