Hey everyone,

Today's problem uses four new commands: left(, right), approx, and %, which represent the left and right delimiters (parentheses), the approximation symbol, and the percent sign, respectively.

**Problem 2:**

Mr. Burns deposits $3000 in a five-year certificate of deposit. At maturity the balance is $4,264.28. Find the annual effective rate of interest governing the account.

*Solution 2:*

*Solution 2:*

Let *i* be the annual effective rate of interest. We want to use the relationship:

$latex displaystyle 3000(1+i)^5=4264.28$

to solve for *i*. The term (1+*i*)^{5} means that the $3000 in the account grew at an annual effective rate of interest *i* for five years.

$latex displaystyle (1+i)^5=frac{4264.28}{3000}$

Divide both sides by 3000.

$latex displaystyle 1+i=left(frac{4264.28}{3000}right)^frac{1}{5}$

Raise both sides to the 1/5 power.

$latex displaystyle i=left(frac{4264.28}{3000}right)^frac{1}{5}-1approx 7.2864541%$

Subtract 1 from both sides to yield the result. A very high yield for a CD!

Note: I've noticed that the $latex LaTeX$ support in WordPress doesn't like currency symbols so I won't be able to use them in my equations. So, any further financial problems I write will have to do without them (unless I figure out how to incorporate the symbols).