SOLUTION: P dollars, invested at interest r compounded annually, increase to an amount A=P(1+r)^2 in 2 years. An investment of $1000 is to increase to an amount greater than $1100 in 2 years

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Question 647839: P dollars, invested at interest r compounded annually, increase to an amount A=P(1+r)^2 in 2 years. An investment of $1000 is to increase to an amount greater than $1100 in 2 years. The interest rate must be greater than what percent?
Answer by lwsshak3(11628) About Me  (Show Source):
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P dollars, invested at interest r compounded annually, increase to an amount A=P(1+r)^2 in 2 years. An investment of $1000 is to increase to an amount greater than $1100 in 2 years. The interest rate must be greater than what percent?
A=P(1+r)^2
A/P=(1+r)^2>1100/1000=11/10
(1+r)^2>11/10
take sqrt of both sides
1+r>√(11/10)
r>√(11/10)-1
=1.0488-1
=0.0488
r>4.88%
interest rate must be greater than 4.88%