Solve the problem.
-If an amount of money, called the principal, P, is deposited into an account that earns interest at a rate r, compounded annually, then in two years that investment will grow to an amount A, given
By the formula $\mathrm { A } = \mathrm { P } ( 1 + \mathrm { r } ) ^ { 2 }$ . If a principal amount of $5000 grows to $6050.00 in two years, what is
The interest rate?
A) 11%
B) 8%
C) 12%
D) 10%

Question

Quizplus · Accepted Answer

The formula given is $A = P(1 + r)^2$. Substituting the given values, $6050 = 5000(1 + r)^2$. Solving for $r$, we find that $r = 0.10$ or 10%.

Solve the Problem A=P(1+r)2\mathrm { A } = \mathrm { P } ( 1 + \mathrm { r } ) ^ { 2 }A=P(1+r)2

Solve the Problem $\mathrm { A } = \mathrm { P } ( 1 + \mathrm { r } ) ^ { 2 }$