For Compound Interest Accounts, the Amount a Accumulated or Due

question 58

Short Answer

For compound interest accounts, the amount A accumulated or due depends on the principal p, interest rate r, number of compoundings per year n, and the time t in years according to the formula . Find r given A = $5462.11, p = $2950, and t = 4 years with interest compounded monthly. Round your answer to the nearest tenth of a percent.

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Definitions:

Other Things Equal

A principle in economic models known as ceteris paribus, which means holding all other variables constant to isolate the effect of one variable.

Variables

Elements, factors, or quantities that can change or have different values in a given situation or analysis.

Economic Decisions

The choices made by individuals, households, or organizations regarding the allocation of resources and the distribution of goods and services.

Purposeful

Refers to actions undertaken with a specific goal or intention in mind.