SOLUTION: If $4200 is invested in a savings account for which interest is compounded semiannually, and if the $4200 turns into $4900 in 4 years, what is the interest rate of the savings acco

Question 1102538: If $4200 is invested in a savings account for which interest is compounded semiannually, and if the $4200 turns into $4900 in 4 years, what is the interest rate of the savings account?
Answer by Boreal(15235) (Show Source): You can put this solution on YOUR website!
Compound interest problem
P=Po(!+r)^t becomes
4900=4200(1+r)^4
7/6=(1+r)^4
take logs of both sides
0.6684=4 log (1+r)
without rounding, divide by 4
0.01673=log (1+r)
don't round yet. Raise everything to the 10th power
1.039=1+r
subtract 1
0.039=r or 3.9%

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