Question

#7 Suppose you deposit $2,788.00 into an account today. In 5.00 years the account is worth $3,985.00. The account earned__% per year. Submit Answer format: Percentage Round to: 2 decimal places (Example: 9.24%, % sign required. Will accept decimal format rounded to 4 decimal places (ex: 0.0924)

Answer 1

We use the formula:
A=P(1+r/100)^n
where
A=future value
P=present value
r=rate of interest
n=time period.

3985=2788*(1+r/100)^5

(3985/2788)^(1/5)=(1+r/100)

(1+r/100)=1.0741

r=1.0741-1

=7.41%(Approx).