Suppose that you had deposited $100 in a bank account for each of the last 5 years.What annual interest rate is attached to this account if there is now (at the end of the fifth year)$758.92 in the account?
A)10%
B)16%
C)19%
D)21%
E)23%

Question

Quizplus · Accepted Answer

The correct answer is D) 21%. The formula for compound interest is A = P(1 + r/n)^(nt), where A is the final amount, P is the principal (initial amount), r is the annual interest rate, n is the number of times per year that the interest is compounded, and t is the number of years. In this case, we have P = $100, A = $758.92, n = 1 (compounded annually), and t = 5. Plugging these values into the formula, we get 758.92 = 100(1 + r/1)^(1*5). Solving for r, we get r = 0.21, or 21%.

Suppose That You Had Deposited $100 in a Bank Account