What is the annual interest rate if 1600 is invested for 6 years and 456in interest is earned?

Answer 1

Total in time 1 = difference between time 1 and 0 + total in time 0 = 456 + 1600 = 2056. We know that

2056 = 1600(1 + i)n

2056/1600 = (1 + i)6

6throot(1.285) = 1 + i

1.0427 ~ 1 + i

0.0427 ~ i

To convert this to a rate, multiply it by 100 percent:

100% * 0.0427 = 4.27% interest rate per annum