Question 360654
the formula a=p(1+r)2 gives the amount A dollar that P dollars will grow to in 2 years at interest rate R (when R is given as a decimal) using compound interest what interest rate will cause 3000 to grow to 3182.70 in two years?
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Plug in what's given into:
{{{a=p(1+r)^2}}}
{{{3182.70=3000(1+r)^2}}}
Solve for r:
{{{3182.70/3000=(1+r)^2}}}
{{{sqrt(3182.70/3000) = 1+r}}}
{{{sqrt(3182.70/3000) - 1 = r}}}
{{{sqrt(1.0609) - 1 = r}}}
{{{1.03 - 1 = r}}}
{{{.03 = r}}}
or,
r = 3%