Question

A sum of $6,500 deposited in an account grows to $7,500 in 8 years. Assuming annual compounding, what interest rate is being paid?

Answer 1

Interest rate = 1.804854685%

Explanation:

`7500=6500*x^8`
`x^8=7500/6500`
`x=root(8)(7500/6500)` = 1.01804854685
ir = `(1 - 1.01804854685)*100` = 1.804854685%