Carlos invested $3,000 in a money market mutual fund that pays interest on a daily basis. The balance in his account at the end of 8 mo (245 days) was $3,130.62. Find the effective rate at which Carlos's account earned interest over this period (assume a 365-day year). (Round your answer to two decimal places.)
10 pts to best answer
10 pts to best answer
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3130.62 = 3000(1+r/365)^245
3130.62/3000 = (1+r/365)^245
log(3130.62/3000) = 245log(1+r/365)
log(3130.62/3000)/245 = log(1+r/365)
r = 0.063498806281300451416891203055212
or
r = 6.35%
3130.62/3000 = (1+r/365)^245
log(3130.62/3000) = 245log(1+r/365)
log(3130.62/3000)/245 = log(1+r/365)
r = 0.063498806281300451416891203055212
or
r = 6.35%