Question 883555: Please help me solve this problem
P=5,500
T=3 years
I=1,200
What is the interest rate
Answer by KMST(5328)   (Show Source):
You can put this solution on YOUR website! How is the interest compounded?
YEARLY COMPOUNDING:
If you deposit $5,500 and interest is 6.8% compounded yearly,
you would have $6,700.03 after 3 years.
Each year, interest would be added amounting to 6.8% of the balance at the start of the year.
Starting with $  , with a rate of  ,
you would get  added as interest at the end of the year,
for a total new balance of  .
The next year, the process repeats, but now the whole $ is earning interest.
Again, you end the year with  times the starting balance,
so you end the second year with  .
The third year you end up with   .
In general, after 3 years, you have earned a total of $ interest, and
 , so
 , so in this case
 ---> (rounded).
So 
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