SOLUTION: Use the compound interest formula A=P(1+r)t to find the annual interest rate, r, if in 2 years an investment of $3,000 grows to $3,360. What is the rate?

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Question 869661: Use the compound interest formula A=P(1+r)t to find the annual interest rate, r, if in 2 years an investment of $3,000 grows to $3,360. What is the rate?
Answer by josgarithmetic(39618) About Me  (Show Source):
You can put this solution on YOUR website!
The formula must be shown as A=P%281%2Br%29%5Et. The time variable is an exponent. Just solve the equation for r, and then put in the given values.

In base 10,
log%2810%2CA%29=log%2810%2CP%29%2Blog%2810%2C%281%2Br%29%5Et%29
log%2810%2CA%29-log%2810%2CP%29=t%2Alog%2810%2C%281%2Br%29%29
log%2810%2C%28A%2FP%29%29=t%2Alog%2810%2C%281%2Br%29%29
highlight_green%28log%2810%2C%281%2Br%29%29=%281%2Ft%29log%2810%2C%28A%2FP%29%29%29

Substitute now the values for t, A, and P, and obtain the value. You want the ANTILOG of this value, which will be 1%2Br, from which you subtract 1 to obtain r.