To compute for the rate for the year, the formula that we will be using would be the r = I / Pt.
Where:
r = interest rate
I = interest; to solve for the interest, we know that our principal value is $30,000 and our future value is $42,135, just deduct the $30,000 from there, and you can get the interest. $42,135 – $30,000 = $12,135
P = principal = $30,000
t = time = 3 years
r = 12,135 / (30,000) (3)
r = 12,135 / 90,000
r = 0.1348 or 13.48%
to check, use the I = Prt then just add the Principal to get the future value
I = Prt
= 30,000 * 0.1348 * 3
= 12,135
Future value = P + I
= 30,000 + 12,135
= 42, 135
