You put $150 in the bank two years ago and forgot about it.The bank sends you a notice that you now have $169.34 in your account.What interest rate did you earn?
A)5.50 percent
B)5.65 percent
C)6.25 percent
D)7.05 percent

Question

Quizplus · Accepted Answer

We can use the formula for compound interest to solve for the interest rate:
A = P(1 + r)^n
where A is the final amount, P is the initial amount, r is the interest rate, and n is the number of periods (years in this case).
Plugging in the given values, we get:
169.34 = 150(1 + r)^2
Dividing both sides by 150:
1.129 = (1 + r)^2
Taking the square root of both sides:
1.0625 = 1 + r
Subtracting 1 from both sides:
r = 0.0625 or 6.25%
Therefore, the answer is C.

You Put $150 in the Bank Two Years Ago and Forgot