Suppose Alice decides to put some money in a new account that compounds twice per year. At the beginning of the year, before the first compounding, she deposits $10,000. At the end of the year, she finds $11,000 in the account. What was the interest rate on this account?

Suppose Alice decides to put some money in a new account that compounds twice per year. At the beginning of the year, before the first compounding, she deposits $10,000. At the end of the year, she finds $11,000 in the account. What was the interest rate on this account?

Microeconomics

13th Edition

ISBN:9781337617406

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter16: Interest, Rent, And Profit

Section: Chapter Questions

Problem 1WNG

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Question

Suppose Alice decides to put some money in a new account that compounds twice per year. At
the beginning of the year, before the first compounding, she deposits $10,000. At the end of the
year, she finds $11,000 in the account.
What was the interest rate on this account?

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