Question

Suppose you deposit $2,278.00 into an account today. In 14.00 years the account is worth $3,686.00. The account earned ____% per year.

Answer 1

future value = amount deposited *(1+interest rate)^ number of years

=>$3,686 = $2,278*(1+interest rate)^14

=>1.61808604 = (1+interest rate)^14

=>1+ interest rate = (1.61808604)^(1/14)

=>1 + interest rate = 1.0349722

=>interest rate =>0.0349722

=>interest rate = 3.50%.....(rounded to two decimals).