What interest rate will cause $2000 to grow to $2184.05 in 2 years?

User Generated

UnybYbir

Mathematics

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 $2000 to grow to $2184.05 in 2 years?

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Explanation & Answer

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A=P1+r2

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

2184.05=2000(1+r/100)^2

simplify

r=4.4 %

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fnpuvagun (127)
Purdue University

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