SOLUTION: You put $2500.00 in a simple interest savings account. two years later, the total account balance is $2665.00. What is the interest rate of the savings account? what will be the t
Question 936328: You put $2500.00 in a simple interest savings account. two years later, the total account balance is $2665.00. What is the interest rate of the savings account? what will be the total amount of money in the account after eight years Answer by TimothyLamb(4379) (Show Source):
You can put this solution on YOUR website! compound-interest formula:
v = p( 1 + (r/n) )^(nt)
where:
v = final value
p = initial (principal) value
r = interest rate (as a decimal)
n = number of compounding periods per year
t = number of years
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interest rate:
n = 1
v = p(1 + r)^t
2665 = 2500(1 + r)^2
(1 + r)^2 = 2665/2500
sqrt( (1 + r)^2 ) = sqrt( 2665/2500 )
1 + r = sqrt( 2665/2500 )
r = sqrt( 2665/2500 ) - 1
r = 0.0324727599312
---
after 8 years:
2500(1 + r)^8
2500(1 + 0.0324727599312)^8
3228.262396839999838
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answer:
rate = 3.247% annually
account value after 8 years = $3228.26
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