Use the compound interest formula A=P(1+r)^t to find the annual interest rate, r, if in 2 years an investment of $3,000 grows to $3,630

Bo Walls

Bo Walls

Answered question

2022-11-24

Use the compound interest formula A = P ( 1 + r ) t to find the annual interest rate, r, if in 2 years an investment of $3,000 grows to $3,630

Answer & Explanation

DelmagnoIHb

DelmagnoIHb

Beginner2022-11-25Added 6 answers

Given
A = $ 3630 P = $ 3000 t = 2  years n =  annual int  = 1 r = 2
We know
A = P ( 1 + r ) t 3630 = 3000 ( 1 + r ) 2 3630 3000 = ( 1 + r ) 2 1.21 = ( 1 + r ) 2
taking square root
1.1 = 1 + x r = 1.1 1 r = 0.1 R = 10 %

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