Question
Asked Nov 2, 2019
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$3000 grows to $3606 in 5 years with annual compunding. Find the interest rate?

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Expert Answer

Step 1

Recall the following fact.

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NT R Amount, A P 1 Т where P is the principal amount N is the number of years R is the rate of interest T is the number of terms per year

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Step 2

Obtain the compound inte...

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Given that P = $3000, A= $3606, T 1 and N = 5 years NT R A=P1 т 5x1 3606 30001+ 3606 (1+ R) 3000 1.202 (1R)

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