Vivian deposited 4,000.00 into a new savings account that earns interest compounded quarterly. After 6 years, the balance in the account was 6,697.00. What was the interest rate on the account?

Solution

Vivian deposited 4, 000.00 into a new savings account that earns interest compounded quarterly. After 6 years, the balance in the account was 6, 697.00. What was the interest rate on the account?

Solution

Rate : 8.68230 \dots %

Solution steps

Translate the problem into an equation:

6697 = 4000 (1 + \frac{r}{4})^{4 \cdot 6}

Solve for

r, 6697 = 4000 (1 + \frac{r}{4})^{4 \cdot 6} : r = 8.68230 \dots %

Rate : 8.68230 \dots %

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