Similar problem, but still confused...
The formula A=P(1+r)^2 gives the amt A in dollars, that P dollars will grow to in 2 years at interest rated r (where r is given as a decimal), using the compound interest?

What interest rate will cause 2000 to grow into 2121.80 in two years

Question

Similar problem, but still confused...
The formula A=P(1+r)^2 gives the amt A in dollars, that P dollars will grow to in 2 years at interest rated r (where r is given as a decimal), using the compound interest?

What interest rate will cause 2000 to grow into 2121.80 in two years

anonymous · Answer

r = sqrt ( A/P) - 1
= sqrt ( 2121.80 / 2000) - 1 = .03 = 3%