SOLUTION: Norris currently has an account balance of $3,703.05. He opened the account 25 years ago with a deposit of $1,725.95. If the interest compounds monthly, what is the interest rate o

Question 523962: Norris currently has an account balance of $3,703.05. He opened the account 25 years ago with a deposit of $1,725.95. If the interest compounds monthly, what is the interest rate on the account?
Answer by Alan3354(69443) (Show Source): You can put this solution on YOUR website!
Norris currently has an account balance of $3,703.05. He opened the account 25 years ago with a deposit of $1,725.95. If the interest compounds monthly, what is the interest rate on the account?
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25 yr = 300 months
3703.05 = 1725.95*(1 + r)^300 r = monthly interest
(1 + r)^300 = 3703.05/1725.95

1+r = 1.005446213
r = 0.5446213% per month
Int rate = r*12 = 6.535456% per year
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PS What does the word "currently" contribute?
Norris currently has an account balance of $3,703.05.
Norris has an account balance of $3,703.05.
It's, like, superfluous.
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