Q:

# Noah currently has an account balance of $2,976.45. He opened the account 11 years ago with a deposit of$1,963.45. If the interest compounds quarterly, what is the interest rate on the account?

Accepted Solution

A:
What we know:
Acct. balance A (11)= $2,976.45 Pricipal=$1,963.45
Compounded (n)=quarterly (4)
rate=r
Compound interest formula: A (t)=p (1+r/n)^nt

What we need toi find:
If the interest compounds quarterly, what is the interest rate on the account? Find r.
A (t)=p (1+r/n)^nt
2976.45=1963.45 (1+r/4)^(4Γ11)
2976.45=1963.45 (1+r/4)^44
2976.45/1963.45=1963.45/1963.45 (1+r/4)^44
1.5159=(1+r/4)^44
(1.5159)^(1/44)=((1+r/4)^44)^(1/44)

1.0095=1+r/4
1.0095-1=1-1+r/4
.0095=r/4
.0095(4)=r/4 (4)
.038=r

Rate = 3.8%
{"found_math": true, "script_math_tex": 0, "script_math_asciimath": 0, "math_annotations": 0, "math_alttext": 0, "mathml": 0, "mathjax_tag": 0, "mathjax_inline_tex": 1, "mathjax_display_tex": 0, "mathjax_asciimath": 0, "img_math": 0, "codecogs_latex": 0, "wp_latex": 0, "mimetex.cgi": 0, "/images/math/codecogs": 0, "mathtex.cgi": 0, "katex": 0, "math-container": 0, "wp-katex-eq": 0, "align": 0, "equation": 0, "x-ck12": 0, "texerror": 0}