Margaret currently has a balance of $7,726.99 in an account earning simple interest. Sixteen years ago she opened the account with an initial deposit of $5,278. What is the interest rate on this account?
+37091 For SIMPLE interest (no compounding)
FV = PV(1 + nr) FV = Future value (7726.99) PV= 5278 n = number of periods(16 years) r= decimal interest(?)
7726.99 = 5278(1+16r)
7726.99/5278 - 1 = 16r
.463999 = 16 r
r=.028999 ~ ..029 = 2.9% interest rate
