Answer:
Step-by-step explanation:
We would apply the formula for determining compound interest which is expressed as
A = P(1+r/n)^nt
Where
A = total amount in the account at the end of t years
r represents the interest rate.
n represents the periodic interval at which it was compounded.
P represents the principal or initial amount deposited
From the information given,
A = $235,000
P = $53,000
n = 1 because it was compounded once in a year.
t = 18 years
Therefore,.
235000 = 53000(1 + r/1)^1 × 18
235000/53000 = (1 + r)^18
4.43 = (1 + r)^18
Raising both sides to the power of 1/18, it becomes
4.43^(1/18) = (1 + r)^18 × 1/18
1.086 = 1 + r
r = 1.086 - 1
r = 0.086
r = 0.086 × 100 = 8.6%
