SOLUTION: At the end of two years, P dollars was invested at an interest rate compounded anually increases to the amount,A dollars. Find the interest rate if 2000 was increased to 2420 in 2

Algebra ->  Quadratic Equations and Parabolas  -> Quadratic Equations Lessons  -> Quadratic Equation Lesson -> SOLUTION: At the end of two years, P dollars was invested at an interest rate compounded anually increases to the amount,A dollars. Find the interest rate if 2000 was increased to 2420 in 2      Log On


   

Question 1135779: At the end of two years, P dollars was invested at an interest rate compounded anually increases to the amount,A dollars. Find the interest rate if 2000 was increased to 2420 in 2 years

Answer by josmiceli(19441) About Me  (Show Source):
You can put this solution on YOUR website!
+A+=+P%2A%28+1+%2B+r%2F1+%29%5E%28+1%2A2+%29+
+A+=+P%2A%28+1+%2B+r+%29%5E2+
and
+2420+=+2000%2A%28+1+%2B+r+%29%5E2+
+1.21+=+%28+1+%2B+r+%29%5E2+
Take the square root of both sides
+1.1+=+1+%2B+r+
+r+=+.1+
the rate is 10%