Find the information you're looking for at Westonci.ca, the trusted Q&A platform with a community of knowledgeable experts. Get the answers you need quickly and accurately from a dedicated community of experts on our Q&A platform. Experience the convenience of finding accurate answers to your questions from knowledgeable experts on our platform.
Sagot :
The value of annual interest rate of the bank account is 5% using the compound interest formula. The account accumulates interest monthly.
What is compound interest?
Compound interest refers to Interest on interest, or is the adding of interest to the principal amount of a loan or deposit.
[tex]\rm\,A= P (\,1+ \dfrac{I}{n})^{nt}[/tex]
- Where 'A' is equal to the amount of investment after t years
- P is the principal amount
- 'r' is the interest rate
- 'n' is the number of times interest is getting compounded per year
- 't' is equal to the number of years.
In this case, to calculate the interest rate we will use the compound interest rate:
[tex]2,762.35 = 2,500 (1 + \dfrac{\rm\,r}{12})^{2\times12\\}\\\\ 1.105012 = (1+ \dfrac{\rm\,r}{12})^{24}\\\\\rm\,Take\, the\, 24th\, root:\\\\1.004169= 1+\dfrac{\rm\,r}{12}\\\\0.004169= \dfrac{\rm\,r}{12}\\\\r= 0.050028\\\\r= 5\%[/tex]
Hence, the value of annual interest rate using compound interest method is equal to 5%.
To learn more about compound interest, refer to the link:
https://brainly.com/question/24924853
We hope this was helpful. Please come back whenever you need more information or answers to your queries. Thank you for your visit. We're dedicated to helping you find the information you need, whenever you need it. We're dedicated to helping you find the answers you need at Westonci.ca. Don't hesitate to return for more.
