Answer:
37.02%
Step-by-step explanation:
The formula of compound interest we will use is:
[tex]FV=PV(1+r)^t[/tex]
Where
FV is the future value [2,400,000 in this case]
PV is the present value [40,000 was invested]
r is the rate of interest per year (what we want to find)
t is the time in years [13 years]
Substituting and solving for r:
[tex]FV=PV(1+r)^t\\2,400,000=40,000(1+r)^{13}\\60=(1+r)^{13}\\1+r=\sqrt[13]{60}\\ 1+r=1.3702\\r=0.3702[/tex]
Thus, rate of interest was 37.02% (rounded to 2 decimal places)
