Business math

No payments were made on a $3500 loan during its three-year term. What was the annually compounded nominal interest rate on the loan if the amount owed at the end of the term was $4298.73? (Round your answer to two decimal places.)

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  1. P = Po(1+r)^n = 4298.73.
    Po = $3500.
    n = 1comp./yr. * 3yrs = 3 Compounding periods.

    3500(1*r)^3 = 4298.73,
    (1+r)^3 = 4298.73/3500 = 1.228,
    Take cube root of both sides:
    1+r = 1.071, r = 0.07/yr.

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