Zach borrowed four thousand dollars from his grandfather to buy a used car so he could travel to and from work. After working for 3 years, he has saved five thousand nine hundred twenty dollars to pay back to his grandfather. At what interest rate did Zach borrow the money?

eleven percent

sixteen percent

twenty-three percent

thirty-two percent

Question

Zach borrowed four thousand dollars from his grandfather to buy a used car so he could travel to and from work. After working for 3 years, he has saved five thousand nine hundred twenty dollars to pay back to his grandfather. At what interest rate did Zach borrow the money?

eleven percent

sixteen percent

twenty-three percent

thirty-two percent

anonymous · Answer

Let x = the interest rate. Then $$4000(1+x)^3=5920$$ since $$Init(1+IR)^{years}=Final$$
Solve for x.