Question

HELPPP!!! Will give medal:)

Kayla currently has an account balance of $2,134.96. She opened the account 12 years ago with a deposit of $1,327.35. If the interest compounds twice a month, what is the interest rate on the account?

Answer 1

\(\bf A=P\left(1+\frac{r}{n}\right)^{nt}
\\ \quad \\
A=\textit{current amount}\to 2,134.96\\
P=\textit{original amount deposited}\to \$1,237.35\\
r=rate\\
n=\textit{times it compounds per year, twice a month, bi-weekly}\to 24\\
t=years\to 12\)

solve for "r"

Answer 2

well. not really bi-weekly in the sense of 52/2 but just twice per month
12 months so 12 * 2 = 24 times a year => "n"

Answer 3

Here's a formula for the rate:

Answer 4

I do not know how to use the formula..

Answer 5

Math is so hard for me to understand.
I plugged the numbers into the formula now im stuck.

Answer 6

log(total/principal)/(n*years)
I'll work it out for you.

Answer 7

log(2,134.96 / 1,327.35) / 24*12 equals

log(1.6084378649) / 288 equals

0.2064042885 / 288

log (1 + (rate/n))=0.2064042885 / 288

log (1 + (rate/n))= 0.0007166816

Answer 8

my choices on my paper are
A. 2.9%
B. 0.3%
C. 4.0%
D.4.9%

Answer 9

1 + (rate/n) = 10^0.0007166816
1 + (rate/n) = 1.0016515826
Subtracting 1 from both sides
rate/n = .0016515826

n = 24 (compounded twice per month)
rate = 24*.0016515826
rate = 0.0396379832
rate * 100 = 3.96379832%
rounding
rate = 4%

Answer 10

GlitterBarbie<3
Did you follow that ?

Answer 11

Kinda, I'm writing it out on paper myself. One second and let me see if i can get it:)

Answer 12

Was does log mean?

Answer 13

It means logarithm.
Do you have a log function on your calculator?

Answer 14

Yes i do.

Answer 15

Divide 2,134.96 / 1,327.35
which equals 1.6084378649
then take the logarithm

Answer 16

logarithm (1.6084378649) = 0.2064042885

Answer 17

I have to get going now.
If you want to see another worked out compound interest example,
Go to this page
http://1728.org/compint3.htm
and scroll down to the last problem