Answer: The rate of interest is 7.18 %
Explanation:
To calculate the rate of interest, we use the equation used for the interest compounded monthly follows:
[tex]A=P(1+\frac{R}{n})^{nT}[/tex]
A = Amount after time period 'T' = $100,000
P = Principal amount = $50,000
R = rate of interest = ?
n = Number of times interest applied per time period = 1 (annually)
T = time period = 10 years
Putting values in above equation, we get:
[tex]100,000=50,000(1+\frac{R}{1})^{1\times 10}\\\\R=0.0718[/tex]
Calculating the rate of interest in percentage:
[tex]\Rightarrow R\times 100=0.0718\times 100=7.18\%[/tex]
Hence, the rate of interest is 7.18 %
