let the rate be i
then
3000(1+i)^4 = 3950.43
(1+i)^4 = 1.31681
now take the fourth root of both sides
1+i = 1.071225
i = .071225
so the annual rate is 7.1225%
Billy takes a $3000 loan that compounds semi-annually. He makes no payments for the first 4 years, and after 4 years he owes $3950.43. What is the interest rate of the loan?
How would I figure this out?
Thank you! :-)
1 answer
1 answer