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10 April, 05:58

One year ago, you invested $1,800. Today it is worth $1,924.62. What annually compounded rate of interest did you earn?

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Answers (1)
  1. 10 April, 08:49
    0
    6.92%

    Explanation:

    The computation of the annually compounded rate of interest is presented below:

    Future value = Invested amount * (1 + rate) ^number of years

    where,

    Invested amount = $1,800

    Rate = ?

    Number of years = 1 year

    The future value = $1,924.62

    So, the rate is

    $1,924.62 = $1,800 * (1 + rate) ^1

    After solving this, the rate is 6.92%
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