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Mark deposited 10,000.00 into a new savings account that earns interest compounded annually. After 10 years, the balance in the account was 21,947.00. What was the interest rate on the account?

Solution

Mark deposited 10, 000.00 into a new savings account that earns interest compounded annually. After 10 years, the balance in the account was 21, 947.00. What was the interest rate on the account?

Solution

Rate : 8.17764 \dots %

Solution steps

Translate the problem into an equation:

21947 = 10000 (1 + \frac{r}{1})^{1 \cdot 10}

Solve for

r, 21947 = 10000 (1 + \frac{r}{1})^{1 \cdot 10} : r = 8.17764 \dots %

Rate : 8.17764 \dots %

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