David borrowed $30,000 to start a business. Four years later, he repaid the $30,000 along with an interest of $1,260. What was the annual interest rate? Round to two decimal places

Answer:About 1.03%Step-by-step explanation:We can use the formula:[tex]FV=P(1+r)^t[/tex]Where FV is the future value (30,000 + 1260 = 31,260)P is the present amount (30,000)r is the rate of interest, yearly (we need to find this, r)t is the time in years (t = 4)Putting in the numbers, we solve for r:[tex]FV=P(1+r)^t\\31260=30000(1+r)^4\\1.042=(1+r)^4\\1+r=1.0103\\r=.0103[/tex]The annual rate of interest was 1.03%