SOLUTION: Hi, I need some help. I am required to show my work, and I have NO idea how to obtain an answer for this kind of problem. If someone could help me, I would be most appreciative. ;o

Algebra ->  Quadratic Equations and Parabolas  -> Quadratic Equation Customizable Word Problems -> SOLUTION: Hi, I need some help. I am required to show my work, and I have NO idea how to obtain an answer for this kind of problem. If someone could help me, I would be most appreciative. ;o      Log On


   

Question 360220: Hi, I need some help. I am required to show my work, and I have NO idea how to obtain an answer for this kind of problem. If someone could help me, I would be most appreciative. ;o)
Directions: Solve
If a $2000 investment compounded to $2289.80 after 2 yrs, determine the annual interest rate of the investment. Use the compound interent formula A=P(1+r)^t
Answer by unlockmath(1688) About Me  (Show Source):
You can put this solution on YOUR website!
Hello,
First, understand what the letters stand for and then we can plug in the numbers.
A=P(1+r)^t
2289.80=2000(1+r)^2
Expand this out to:
2289.80=2000(1+2r+r^2)
rewritten as:
2289.80=2000r^2+4000r+2000
Subtract 2289.8 from both sides:
0=2000r^2+4000r-289.80
Factor this or could use the quadratic formula to get:
x+=+%28-b+%2B-+sqrt%28+b%5E2-4%2Aa%2Ac+%29%29%2F%282%2Aa%29+
Plug in the values to get:
7% interest.
Make sense?
RJ
www.math-unlock.com