SOLUTION: find the annual intrest rate if an investment of $4000 earns $75 in intrest over 3 years

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Question 616104: find the annual intrest rate if an investment of $4000 earns $75 in intrest over 3 years
Answer by ewatrrr(24785) About Me  (Show Source):
You can put this solution on YOUR website!
 

Hi, 

In General A+=+P%281%2Br%2Fn%29%5Ent

A = Accumulated Amount $4075

P= principal = $4000

r= annual rate = r

n= periods per year = 1 

t= years = 3 

A%2F+P+=+1.01875+=++%281%2Br%29%5E3

    log(1.01875) = 3log(1+r)

    log(1.01875)/3 = .0027 =  log(1+r)

             10%5E%28.0027%29+=+1%2Br

                     .0062 = r  OR  Interest rate is .62%