Answer:
R = 6.4%Step-by-step explanation:
Given,
Sum invested (P) = $870
Time (t) = 12 years
Amount (A) = $1880
For compounded daily, n = 360
We know that,
A = P(1 + r/n)^nt
Solving for rate r as a decimal
r = n[(A/P)1/nt - 1]
r = 360 × [(1,880.00/870.00)1/(360)(12) - 1]
r = 0.0642168
Then convert r to R as a percentage
R = r * 100
R = 0.0642168 * 100
R = 6.422%/year
Summary:
The interest rate required to get a total amount of $1,880.00 from compound interest on a principal of $870.00 compounded 360 times per year over 12 years is 6.422% per year.