The interest rate is 36% per year if the value of a savings account can be found using the equation 300(1.03)²⁴ option (c) is correct.
It is defined as the interest on the principal value or deposit and the interest which is gained on the principal value in the previous year.
We can calculate the compound interest using the below formula:
[tex]\rm A = P(1+\dfrac{r}{n})^{nt}[/tex]
Where A = Final amount
P = Principal amount
r = annual rate of interest
n = how many times interest is compounded per year
t = How long the money is deposited or borrowed (in years)
We have:
The value of a savings account can be found using the equation =
= 300(1.03)²⁴
From the function:
F(x) = a(1+r)ˣ
On compare:
1 + r = 1.03
r = 0.03
or
r = 3% monthly
r = 3×12 = 36% yearly
Thus, the interest rate is 36% per year if the value of a savings account can be found using the equation 300(1.03)²⁴ option (c) is correct.
Learn more about the compound interest here:
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