Answer: 8%.
Step-by-step explanation:
To find this answer, use the compounding interest rate formula, or an exponential function:
[tex]A = P(r)^t[/tex]
Where A is the amount of money after t years, using P (principal) dollars as the investment and r as the rate.
We are trying to solve for r, so substitute the correct values for the other three variables:
[tex]7000 = 3500(r)^9\\\\2 = r^9[/tex]
Solving for r, we find that r to the ninth power equals 2.
Simplifying this, r is equal to 2^(1/9), or 1.08~. The interest rate was 8 percent.
