Question 3

Farhan owns a small office building, which he rents out to small businesses. He expects that the air conditioning system will have to be replaced 1 year from now, and this will cost $70,000. To make sure he has the money available 1 year from now, a local bank has told Farhan that he can invest $68,000 today to guarantee he will have $70,000 in one year.

What is the annual rate of compound interest the bank is offering Farhan with this investment?

Round your answer to the nearest whole number. For example, 10.4 rounded to the nearest whole number is 10. 10.5 rounded to the nearest whole number is 11.