Milo Has Just Inherited $6 500 and Immediately Spent the Money

Multiple Choice

Milo has just inherited $6 500 and immediately spent the money purchasing an investment certificate. He decided to use the investment certificate to finance his return to the university that he left because of the financial problems at the time. Milo calculated that the interest rate the bank would pay on his investment certificate would allow him to accumulate the $7 600 he would need over 4 years. What interest rate does the bank pay?

A) 2.0
B) 2.5
C) 3.0
D) 3.5
E) 4.0