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rafael opens a savings account with a deposit of $1,500. he deposits $400 one year later and $1000 a year after that. just after rafael's deposit of $1000, the balance in his account is $2,987. find the annual effective interest rate governing the account. (round your answer to two decimal places.)

Respuesta :

Use the formula to determine compound interest:

A = P x (1 + r)n

A is the final balance.

P = the initial balance (or principal)

r is the interest rate expressed as a decimal (2% becomes 0.02) for each period.

The number of time intervals is n.

Can you become rich via compound interest?

Over time, compound interest causes your investments to rise significantly. Therefore, even a lower initial investment can result in greater wealth generation as long as you have a longer time horizon, say five years.

How can I grow my money?

You must reinvest your returns back into your account for compounding to take effect. Consider an investment of $1,000 that yields a 6% return. If you reinvest your return, you will make $60 in the first year, increasing your total investment to $1,060.

To learn more about compound interest from the given link.

https://brainly.com/question/24924853

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