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?
2. Lucas opened a savings account 20 years ago with a deposit of $3,815.24. The account has an interest rate of 3.3% compounded quarterly. How much interest has Lucas earned?
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1) - You should try and do some of these financial problems yourself and show your work. Will tell you if you are right or not, and will explain to you where you went wrong. Just make an attempt!. Hint: Use PV, FV formulas
Congrats!!. You got both of them RIGHT!. That is what you should always do. Try and get the answer, and then submit the question with the answer that you got and will tell you if you are right or not. Because we have computers that can calculate these simple problem almost instantly and will give you the answers in a few minutes.
+129840 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%
