The formula A=P(1+r)^2 gives the amount A in dollars that P dollars will grow to in 2 years at interest rate r. , using compound interest. What interest rate will cause $5000 to grow to $5512.50 in 2 years?

Kayla Mcdowell

Kayla Mcdowell

Answered question

2022-10-16

The formula A = P ( 1 + r ) 2 gives the amount A in dollars that P dollars will grow to in 2 years at interest rate r. Using compounded interest. What interest rate will cause $5000 to grow to $5512.50 in 2 years?

Answer & Explanation

faux0101d

faux0101d

Beginner2022-10-17Added 21 answers

Solution:
5512.5 = 5000 ( 1 + r ) 2 1 + r = 5512.5 5000 1 + r = 1.05 r = 0.05 = 5 %

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