Answer:
The effective annual rate is 10%
Explanation:
Future value = Present value * (1+r)^n
(1+r)^n = Future value / Present value
r = (Future value / Present value)^n - 1
Here r is the rate
Substitute the values as below
r = (Future value / Present value)^n - 1
r= ($100,000 / $97,654)^4 - 1
r = 1.10000 - 1
r = 0.10000
r = 10%
