Sally invests $4,000 in a savings account which compounds interest monthly. after 10 years, she has a balance of $4,573.23. what is the annual interest rate (as a percentage) of the account, rounded to the nearest 0.01%?

The problem states that the interest is compounded monthly. For uniformity, we convert 10 years to months. This is equivalent to 120 months.

The equation would be



where F is the future worth = $4,573.23
           P is the present worth = $4,000
           n is the number of periods = 120 months











To convert to effective rate



where m is the number of periods in a year. There are 120 month in a year.





or,

The annual interest rate would be 0.67%

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