Answer:
rate = 17.49 %
Explanation:
given data
initial amount = $B
annual effective interest rate = i
interest in the third year = $426
discount in the seventh year = $812
solution
we know here formula for interest rate that is
interest = initial amount × [tex](1+r)^{t}[/tex] .............1
$426 = $B × [tex](1+r)^{t}[/tex]
$B = [tex]\frac{426}{(1+r)^3}[/tex] ...............2
$812 = $B × [tex](1+r)^{t}[/tex]
$B = [tex]\frac{812}{(1+r)^7}[/tex] ...............3
so from equation 2 and 3 we compare initial amount
[tex]\frac{426}{(1+r)^3} = \frac{812}{(1+r)^7}[/tex]
solve it we get t
rate r = 0.1749
rate = 17.49 %
