Question

Three years ago, you invested $3,350.00. Today, it is worth $4,100.00. What rate of interest did you earn

Answer 1

Answer:

6.97%

Explanation:

the formula to be used is

The formula for calculating future value:

FV = P (1 + r)^n

FV = Future value  

P = Present value  

R = interest rate  

N = number of years  

$4,100.00 = $3,350.00 x ( 1 + r)^3

divide both sides of the equation by $3,350.00

$4,100.00 / $3,350.00 = ( 1 + r)^3

1.223881 = ( 1 + r)^3

find the cube root of both sides

1.069661 = 1 + r

r = 6.97%