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Hudson is going to invest $320 and leave it in an account for 9 years. Assuming the
interest is compounded monthly, what interest rate, to the nearest tenth of a percent,
would be required in order for Hudson to end up with $540?

Answer :

Answer:

5.8

Step-by-step explanation:

The interest rate, to the nearest tenth of a percent, will be 0.05828.

How do you determine the amount of compound interest?

If the principal amount is P, the interest rate is R percent per unit time, and the compound interest is left for T units of time, the interest amount gained is:

[tex]\rm CI = P\left(1 +\dfrac{R}{100}\right)^T - P[/tex]

The total is:

[tex]\rm A = CI + PA = P(1 +\dfrac{R}{ 100})T[/tex]

The amount is found as;

[tex]\rm A = P(1+\frac{r}{n})^{nt}\\\\ 540=320 (1+\frac{r}{12} )^{12\times 9}\\\\ (1+\frac{r}{12})^{108}=\frac{540}{320}\\\\ 1+\frac{r}{12}=(\frac{540}{320})^{\frac{14}{108}[/tex]

[tex]\rm 1+ \frac{r}{12}=1.00486\\\\ \frac{r}{12}=0.00486\\\\ r=12 \times 0.0486 \\\\ r=0.05828[/tex]

Hence, the interest rate, to the nearest tenth of a percent, will be 0.05828.

To learn more about compound interest, refer:

https://brainly.com/question/11897800

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