A sum of 900 is invested for 10 years and the interest is co

A sum of $900 is invested for 10 years and the interest is compounded quarterly. There is $1150 in the account at the end of 10 years. What is the nominal annual rate? Your score was recorded. You have attempted this problem 4 times. You received a score of 0% for this attempt. Your overall recorded score is 0%.

Solution

Compound Interest formula : Amount = Principal( 1+r/100*n)^(t*n)

where r -- rate , n ---compounding=4 , t= time

1150 = 900( 1 +r/400)^40

Taking natural log on both sides:

ln(1.278) = 40ln( 1+r/400)

0.006 = ln( 1+r/400)

1.006 = 1+r/400

r/400 = 0.006

r = 2.45 % interest rate