A company invests $15,000.00 in an account that compounds interest annually. After two years, the account is worth $16,099.44. Use the function in which r is the annual interest rate, P is the principal, and A is the amount of money after t years. What is the interest rate of the account?

A = P (1 + r) t

1.04%

3.6%

5.4%

7.3%

Principal = $15000

Amount = $16099.44

Rat of interest = r

Time = 2 years

Then

A = P (1 + r) ^t

16099.44 = 15000 (1 + r) ^2

(1 + r) ^2 = 1.073

(1 + r) ^2 = (1.036) ^2

Then

1 + r = 1.036

r = 1.036 - 1

= 0.036

= 0.036/100

= 3.6%

From the above deduction, it can be easily concluded that the correct option among all the options that are given in the question is the second option.