SOLUTION: In 2 years, an investment of $10,000 grows to $11,449. Use the compound interest formula A = P(1 + r)t , where P is principal in dollar and A is the amount after t y

Question 1139631: In 2 years, an investment of $10,000 grows to $11,449. Use the compound interest formula A = P(1 + r)t
, where P is
principal in dollar and A is the amount after t years, to find the annual interest rate, r.

Answer by ikleyn(52800)   (Show Source): You can put this solution on YOUR website!
.

The formula   A = P(1+r)t in your post is WRONG and INCORRECT.

No one bank and no one account works according to this formula.

The correct formula is   A = ,   and then

    11449 = ,


     = 


    1.1449 = 


    1 + r = 


    1 + r = 1.07


    r = 1.07 -1 = 0.07 = 7%.        ANSWER

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