The formula used for this problem would be
F = P (1+i)^n, where F is the future worth, P is the present worth, i is the annual interest and n is the number of years. Substituting the known values, we could determine i.
$390 + $4000 = $4000 (1+i)^3
(1+i)^3 = $4390/$4000
(1+i) = cube root (1.0975)
1+i = 1.0315
i = 1.0315 - 1
i = 0.0315 * 100
i = 3.15%
The correct answer is 3.15%, From the choices, the nearest would be letter A.
