Question

The amount P is invested at interest rate r compounded annually and grows to the amount A in two years. Find the interest rate.

P=4000, A=5267.03

Answer 1

ranga help

Answer 2

Use the formula:
\[A = P(1+\frac{ i }{ n })^{nt}\]

Answer 3

annual compounding means n= 1
can you figure it out now?

Answer 4

A=P(1+r)^2 is what my textbook has listed. What does i and n stand for?

Answer 5

i is interest rate and n number of times interest is comunded

Answer 6

Oh, okay. The equation I had down before it was 5267.03=4000(1+r)^2. Is that set up correctly (according to the textbook)? Because my teacher only wants us to solve it that way. Also, my main problem is solving the equation.

Answer 7

yea its setup correctly

Answer 8

you just need to isolate r by itself

Answer 9

Okay. I tried dividing 5267.03 by 4000 initially, but then I got stuck with a very weird not-trinomial square thing after trying to isolate r. What's the right way to do it?

Answer 10

i give you the first step
divide both sides by 4k

Answer 11

yea you got the first step right

Answer 12

you should have something like this
\[\frac{ 5267.03 }{ 4000 } = (1+r)^2\]

Answer 13

Yeah, I have that. What would be the next step? I already checked to see if 5267.03 had a square root, but it didn't. So how do I continue?

Answer 14

can you tell me the next step?

Answer 15

you can just put it in your calculator

Answer 16

if you isolate r you get
\[r = \sqrt{\frac{ 5267.03 }{ 4000 }} - 1\]
tell me what you get as your answer from your calculator

Answer 17

Which part? The fraction?

Answer 18

everything

Answer 19

i set everything up for you so you just need to solve for r

Answer 20

Thanks. Wait a second.

Answer 21

I got 0.1475004447.

Answer 22

correct
to finish put it as a percent and your done

Answer 23

Oh. Thank you :) Have a good night.

Answer 24

your welcome