If #3000# dollars invested in a bank account for #8# years, compounded quarterly, amounts to #4571.44# dollars, what is the interest rate paid by the account?
1 Answer
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Explanation:
We'll use the compounding interest formula,
Here,
Plug in the information you have:
So
Divide both sides by
Now, there are a couple of ways to solve this, with either roots or logarithms. Since you're in pre-calculus, I'll assume your teacher wants you to use logs.
Take the
Remember the property of logarithms that says
Bring the
Then divide both sides by
Simplify:
Using the inverse property of logarithms, change the expression to read:
Simplify the left:
Solve for