A company invests $15,000.00 in an account that compounds interest annually. After two years, the account is worth $16,099.44. U
se the function in which r is the annual interest rate, P is the principal, and A is the amount of money after t years. What is the interest rate of the account? A = P(1 + r)t
Principal = $15000 Amount = $16099.44 Rat of interest = r Time = 2 years Then A = P(1 + r)^t 16099.44 = 15000 (1 + r)^2 (1 + r)^2 = 1.073 (1 + r)^2 = (1.036)^2 Then 1 + r = 1.036 r = 1.036 - 1 = 0.036 = 0.036/100 = 3.6% From the above deduction, it can be easily concluded that the correct option among all the options that are given in the question is the second option.
