Answer:
8.2%
Step-by-step explanation:
You want the interest rate that gives a balance of 17499 after 11800 is invested for 5 years and the interest is compounded annually.
Compounded Interest
The value of an account earning interest at rate r compounded annually for t years is ...
A = P(1 +r)^t
Solving for r, we find ...
A/P = (1 +r)^t . . . . . . . . divide by P
(A/P)^(1/t) = 1 +r . . . . . . take the t-th root
r = (A/P)^(1/t) -1 . . . . . . subtract 1
Application
Using the given account values and time, we find the interest rate to be ...
r = (17499/11800)^(1/5) -1 ≈ 0.081997 ≈ 8.2%
The interest rate is 8.2%.
