What interest rate will cause $4000 to grow to $4494.40 in 2 years?

Mathematics
Tutor: None Selected Time limit: 1 Day

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 $4000 to grow to $4494.40 in 2 years?

Jun 14th, 2015

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

A=P(1+r/100)^nt

n=times per year

t=years

in this case

n=1

t=2


4494.40=4000(1+r/100)^2

simplifing


we get

r=6%



Please let me know if you need any clarification. I'm always happy to answer your questions.
Jun 14th, 2015

Thank you so much! 

Jun 14th, 2015

you are always welcome...:)

Jun 14th, 2015

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