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wariber [46]
3 years ago
10

Peter deposited $8,975 into a savings account 21 years ago. The account has an interest rate of 3.8% and the balance is currentl

y $19,909.20. How often does the interest compound?

Mathematics
1 answer:
Alexus [3.1K]3 years ago
4 0
The formula for the future value of the account is
  A = P(1 + r/n)^(nt)
where you have
  A = 19909.20
  P = 8975
  r = 0.038
  t = 21

The resulting equation is not one that can be solved by algebraic means, but we can use a graphing calculator to find n. This graph shows us n = 12, so

the interest compounds monthly.

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