SOLUTION: The formula A=P(1+r)^2 gives the amount A in dollars that P dollars will grow to in 2 years at interest rate r(s where r is given as a decimal) comma using compound interest. What

Question 1117266: The formula A=P(1+r)^2 gives the amount A in dollars that P dollars will grow to in 2 years at interest rate r(s where r is given as a decimal) comma using compound interest. What interest rate will cause $ 5000 to grow to $ 5408.00 in 2 years?

Found 2 solutions by josgarithmetic, ikleyn:
Answer by josgarithmetic(39617) (Show Source): You can put this solution on YOUR website!
assuming the compounding period is 1 year

or 4%
Answer by ikleyn(52781) (Show Source): You can put this solution on YOUR website!
.

5408.00 = 5000*(1+r)^2, ====> = = 1.0816 ====> 1 + r = = 1.04 ====> r = 0.04 = 4%. Answer. The annual interest rate is 0.04, or 4%, compounded annually.

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