A principal of $5000 was invested in a savings account for 4 years. If the interest earned for the period was $400, what was the interest rate?
2007-03-23 10:30:07 · 3 answers · asked by Sweetie 2 in Business & Finance ➔ Personal Finance
Agree with previous poster if compounding was continuous.
1.924% continuously compounded for 4 years.
Also:
0.1605% monthly compounding for 4 years = 1.926% annual rate.
or:
8% compounded every four year period.
2007-03-23 11:10:20 · answer #1 · answered by roger_v_kint 3 · 0⤊ 0⤋
If the interest replaced into not compounded, it would be in basic terms .08%. (under a million%) an fairly undesirable value. that is even decrease if its compounded. you should to look for a miles better decrease value rates/investment plan.
2016-10-19 11:11:07 · answer #2 · answered by croes 4 · 0⤊ 0⤋
The interest rate is 1.924% assuming that you are looking for the continuously compounding the interest rate on an annual basis.
2007-03-23 10:33:22 · answer #3 · answered by homertorpedo 3 · 0⤊ 0⤋