Question
You invest $7,000 in a two-year CD. At the end of the 2 years, you receive $8,331.97. Assume you left the first year' s interest in the account, what was your yearly interest rate?
Answers
Reiny
7000(1+i)^2 = 8331.97
(1+i)^2 = 1.1902814..
1+i = √1.19028...
1+i = 1.091
i = .091
or 9.1%
(1+i)^2 = 1.1902814..
1+i = √1.19028...
1+i = 1.091
i = .091
or 9.1%