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

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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) About Me  (Show Source):
You can put this solution on YOUR website!
5000%281%2Br%29%5E2=5408 assuming the compounding period is 1 year

%28r%2B1%29%5E2=5408%2F5000=1.0816
r%2B1=1.04
r=0.04 or 4%

Answer by ikleyn(52778) About Me  (Show Source):
You can put this solution on YOUR website!
.
5408.00 = 5000*(1+r)^2,   ====>


%281%2Br%29%5E2 = 5408%2F5000 = 1.0816  ====>


1 + r = sqrt%281.0816%29 = 1.04  ====>


r = 0.04 = 4%.


Answer.  The annual interest rate is 0.04, or 4%, compounded annually.