An account had an initial deposit made and then interest was applied once a year at a fixed rate. The amount of money, in dollars, in the account after t years, was 103 (1.02) t. What was the annual interest rate?

.02%

.03%

2%

3%

Question

Weaver

Mathematics

30 December, 01:03

An account had an initial deposit made and then interest was applied once a year at a fixed rate. The amount of money, in dollars, in the account after t years, was 103 (1.02) t. What was the annual interest rate?

.02%

.03%

2%

3%

+1

Answers (1)

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Dennis Fernandez · Answer 1

Answer would be 2%

after 1 year = 103 x 1.02 = 105.06

after 2 years = 103 x 1.02 x1.02 = 107.16

and so on as compound interest, ie interest on top of interest already paid.

An account had an initial deposit made and then interest was applied once a year at a fixed rate. The amount of money, in dollars, in the account after t years, was 103 (1.02) t. What was the annual interest rate?.02%.03%2%3%

An account had an initial deposit made and then interest was applied once a year at a fixed rate. The amount of money, in dollars, in the account after t years, was 103 (1.02) t. What was the annual interest rate?

.02%

.03%

2%

3%