Answer:
Step-by-step explanation:
A = P * e^(rt)
Where:
A = final balance ($24,374.43)
P = initial investment ($6,777)
e = Euler's number (approximately 2.71828)
r = interest rate (unknown)
t = time in years (16)
We can rearrange the formula to solve for the interest rate (r): r = ln(A/P) /t
Using the given values, we have: r = ln(24,374.43/6,777) / 16
Now, let's calculate this: r = ln(3.5984) / 16
Using a calculator, the natural logarithm (ln) of 3.5984 is approximately 1.283.
So, r = 1.283 / 16
Dividing 1.283 by 16, we get: r ≈ 0.0802
Therefore, the interest rate of the retirement account is approximately 0.0802 or 8.02%.
