Question

If P dollars are deposited at an interest rate r and compounded n times, the future value An can be found by the formula An=P(1+r)^n. Find the rate of interest if a principle amount of $5500 grows to $6655 in two years if interest is compounded annually.

Answer 1

Can you assign numbers to An, P, and n in your equation An=P(1+r)^n
based on the info in the question?

Answer 2

So, 6655=5500(1+r)^2. Do I foil the multiply by 5500?

Answer 3

starting with
6655=5500(1+r)^2
divide both sides by 5500

Answer 4

1.21

Answer 5

\[\frac{6655}{5500}= (1+r)^2 \]
now take the square root of both sides

Answer 6

\[ 1.21 = (1+r)^2\]

Answer 7

\[\sqrt{6655\div5500}\]= 1 + r

Answer 8

oh yeah

Answer 9

So, .21?

Answer 10

sqrt(1.21)= (1+r)
1.1= 1+r

right?

Answer 11

So, r = .1?

Answer 12

or 10%

Answer 13

yes

you can check by using it in your formula:

5500(1+0.1)^2

Answer 14

if it is the correct r, you should get 6655

Answer 15

Your great. Wish I could send you money or something. Many thanks from Georgia.

Answer 16

Thanks. btw, you're (you are) not your