1. Addison currently has an account balance of $1,737.83. She opened the account 11 years ago with a deposit of $1,334.62. If the interest compounds semiannually, what is the interest rate on the account?
We have
1737.83 = 1334.62( 1 + R/2)^(11 *2)
1737.83 = 1334.62( 1 + R/2)^(22) divide both sides by 1334.62
[1737.83 / 1334.62] = ( 1 + R/2)^(22) take the 22nd root of both sides
[1737.83 / 1334.62]^(1/22) = 1 + R/2 subtract 1 from both sides
[1737.83 / 1334.62]^(1/22) − 1 = R/2 multiply both sides by 2
2 ( [1737.83 / 1334.62]^(1/22) − 1] = R ≈ 0.0241437 ≈ 2.41%
