Question

If you invest $100 today in a bank account that pays a one time interest at the end of each year (you leave the interest you collect from the bank from the first year in the bank to collect interest during the second year). if you have $121 at the end of the second year what is the interest rate the bank pays each year on your account. show your work.

Answer 1

Answer is 10%

$100 x 10% = $10 so after first year you have $110.00

$110 x 10% = $11 so after second year you have $121.00