This is a word problem.Three years ago, I depsited $600.00 in my account, and
now I have 708.00. What is the interest rate on my account?
A = P(1 + )nt
A = ending amount = 708
P = beginning amount = 600
r = rate expressed as a decimal (what we are to find)
n = number of times a year the interest is compounded.
This is not given, so we assume it to be 1, once a year.
t = time in years = 3
708 = (600)(1 + )((1)(3))
708 = 600(1 + r)3
Divide both sides by 600
= (1 + r)3
1.18 = (1 + r)3
Take cube roots of both sides:
1.056721805 = 1 + r
Subtract 1 from both sides
.056721805 = r
As a percent that's 5.6721805%
Edwin