Answer :
The rate of compound interest found per year is 61.01 using the given data if Edna invests $500.
What is the formula for compound interest?
- In order to compute compound interest, multiply the principle of the original loan by the yearly interest rate multiplied by the number of compound periods minus one.
- You will then be left with the principal amount of the loan plus compound interest.
- Compound interest formula is given as:
[tex]A = (1+\frac{r}{n})^t^n[/tex]
Given: At a compound interest rate of r% annually, Edna makes a $500 investment. The investment made by Edna is worth $559.78 after six years.
Compound interest formula is given as:
[tex]A = (1+\frac{r}{n})^t^n[/tex]
[tex]500 = (1+\frac{r}{59.78})^6^0[/tex]
(1.109-1)559.78 = r
r = 61.01
Therefore, the rate of compound interest found per year is 61.01 using the given data.
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