If $3800 is invested in a savings account for which interest is compounded quarterly, and if the $3800 turns into $4300 in 2 years, what is the interest rate of the savings account?

The interest rate of the savings account is 6.2%Compound interestThe formula for calculating the compound amount is expressed asA = P(1+r/n)^ntGiven the following parametersP = $3800
A = $4300
t =2 yearsRequiredRate Substitute4300 = 3800(1+r/4)^4(2)
43/38= (1+r/4)^8
1.1316 = (1+r/4)^8Take ln of both sidesln(1.1316) = 8ln(1+r/4)0.01545 = ln(1+r/4)1 + r/4 = e^0.015451 + r/4 = 1.01557r/4 = 0.01557r = 6.2%Hence the interest rate of the savings account is 6.2%Learn more on compound interest here: