Question

Mrs. Emily Francis saves RM10 000 in a bank . by the end of the eighth year , the money collected amounts to RM19 992.71.if the bank pays an annual interest of x% for a year and is compounded every 6months , calculate the value of x​

Answer 1

Answer:

8.85% per year

Step-by-step explanation:

To find the interest rate of a compounding interest, we use the formula:

$r=n[(\dfrac{A}{P})^{\dfrac{1}{nt}}-1]$

Before we start solving, let's break down all the variables that we have.

A = 19,992.71

P = 10,000.00

n = 2

t = 8

r = ?

Now let's put the values into the formula.

$r=2[(\dfrac{19,992.71}{10,000.00})^{\dfrac{1}{2(8)}}-1]$

$r=2[(\dfrac{19,992.71}{10,000.00})^{\dfrac{1}{16}}-1]$

$r=2[(\dfrac{19,992.71}{10,000.00})^{0.0625}-1]$

$r=2[(1.9992.1)^{0.0625}-1]$

$r=2[1.0442499885-1]$

$r=2[0.0442499885]$

$r=0.08849997699$ or $8.85%$

So the rate the Mrs. Emily Francis got from the bank was 8.85% per year.