Finding Interest Rate

Question

The equation for the future value of a deposit earning compound interest is , where

P = the initial deposit

t = years invested

r = rate at which interest is compounded annually

n = number of times the interest is compounded per year

After 10 years, a $2,000-dollar investment compounded annually has grown to $3600. What is the

interest rate to the nearest whole-number percent?

Answer 1

3600 = 2000(1 + r)¹⁰, n = 1

1.8 = (1 + r)¹⁰

1.06054 = 1 + r

0.06054 = r