20. If $250 is invested in an account with interest compounded annually, and two years later, there is $273.53 in the accoundt, what was the annual interest rate for the account?

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- January 15th 2008, 01:55 PMrlarachinterest
20. If $250 is invested in an account with interest compounded annually, and two years later, there is $273.53 in the accoundt, what was the annual interest rate for the account?

- January 15th 2008, 03:17 PMmr fantastic
Standard formula:

where S is the amount at the end of the time period, P is the initial amount (principle), i = (rate per annum)/(number of periods per year), n = (number of periods per year) (length of investment period).

In your problem, S = 273.53, P = 250, i = (rate per annum)/(1) = rate per annum, n = (1)(2) = 2.

Sub and solve for i.