Question

Use the compound interest formula A=P(1+R)^t and the given information to solve for R.
A=$2600 P=$1800 T=7

Answer 1

Plugging in the given values we get:
\[2600=1800(1+r)^{7}\]
Do you want help step by step to find r?

Answer 2

@MawyKay Are you there?

Answer 3

yes

Answer 4

Do you want to go step by step? The first step is to divide both sides of the equation by 1800. This step will isolate the expression with the exponent.

Answer 5

1.44=(1+r)^7 correct?

Answer 6

do you know what the next step is?

Answer 7

Good work! However take the number on the left hand side to four decimal places, giving 1.4444.
Next take logs of both sides giving:
\[\log_{} 1.4444=7\log_{} (1+r)\ .............(1)\]
and now divide both sides of equation (1) by 7.

Answer 8

what does that look like? I'm confused.

Answer 9

\[\log_{} 1.4444=7\log_{} (1+r)\ ...........(1)\]
and now divide both sides of equation (1) by 7, giving
\[\frac{\log_{} 1.4444}{7}=\log_{} (1+r)\ .......(2)\]
0.0228125=log (1 + r) ..............(3)
Therefore by the rules of logs
\[10^{0.0228125}=(1+r)\]
1.053932 = 1 + r
r = 0.053932 or 5.3932%