What interest rate will cause $6000 to grow to $6741.60 in 2 years?

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Question Description

The formula A=P1+r2 gives the amount A in dollars that P dollars will grow to in 2 years at interest rate r where r is given as a decimal), using compound interest. What interest rate will cause $6000 to grow to $6741.60 in 2 years?

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Explanation & Answer

Thank you for the opportunity to help you with your question!

Ok Let me make it simpler for you.

This is how we write it

P = principal amount (the initial amount you borrow or deposit)

r  = annual rate of interest (as a decimal)

t  = number of years the amount is deposited or borrowed for.

A = amount of money accumulated after n years, including interest.

n  =  number of times the interest is compounded per year 

The  formula is

A= P(1 +r/n) ^nt

$6741.60= $6000(1 +r/1) ^1 x 2


$6741.60=$6000 (1+r) (1+r)

$6741.60=$6000 (1+2r+r^2)

Evaluate the RHS

$6741.60=$6000+$12000r +$6000r^2

Subtract $6000 both sides

$741.6=$12000r +$6000r^2

Solve by completing the square

Which 2 numbers do you add to get 12000 and multiply to get 6000

Am still working on the last part Please give me a few minutes you will have the remaining part

Please let me know if you need any clarification. I'm always happy to answer your questions.

avpubynfXvz (1253)
Duke University

Just what I needed…Fantastic!