Solution:
The formula that we can apply in this case is the following:
[tex]r\text{ = (}\frac{1}{t})(\frac{A}{P}-1)[/tex]now, solving we get:
[tex]r\text{ = (}\frac{1}{7})(\frac{1400}{1200}-1)=\text{ }0.02380952[/tex]if we convert this amount into a percentage we get the final answer:
[tex]0.02380952\text{ x 100\% = }2.381[/tex]then, the correct answer is:
2.381% per year
