At what rate must $287.50 be compounded annually for it to grow to $650.01 in 14 years?
A) 6 percent
B) 5 percent
C) 7 percent
D) 8 percent

Question

Quizplus · Accepted Answer

The formula for compound interest is A = P(1 + r)^n, where A is the amount of money accumulated after n years, including interest, P is the principal amount, r is the annual interest rate (decimal), and n is the time the money is deposited or borrowed for, in years. Plugging in the given values: 650.01 = 287.50(1 + r)^14. Solving for r gives an interest rate of approximately 6 percent.

At What Rate Must $287