Question
Suppose that you want to deposit $8,000 in an RRSP account that pays interest at a fixed rate of 100r% per year compounded monthly; for example, if the interest rate is 4%, then r = 0.04. Find the rate of interest r on the account if the interest earned after 3 years is $750.
Answers
oobleck
8000((1 + r/12)^(12*4) - 1) = 750
(1 + r/12)^48 = 1.09375
1 + r/12 = 1.00186686
r/12 = 0.00186866
r = 0.0224 = 2 1/4 %
(1 + r/12)^48 = 1.09375
1 + r/12 = 1.00186686
r/12 = 0.00186866
r = 0.0224 = 2 1/4 %