the amount of money A in a acount in which P dollars is invested for 2 years is given by the formula A=P (1+r) ^2, where r is the interest rate compounded annually. If an investment of $800 in the account grows to $882 in two years, at what interest rate was it invested

Question

Mathematics

Brooks Forbes

19 August, 12:23

the amount of money A in a acount in which P dollars is invested for 2 years is given by the formula A=P (1+r) ^2, where r is the interest rate compounded annually. If an investment of $800 in the account grows to $882 in two years, at what interest rate was it invested

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Answers (1)

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Olson · Answer 1

5%

Step-by-step explanation:

A = P (1 + r) ²

882 = 800 (1 + r) ²

882 / 800 = (1 + r) ²

√ (882 / 800) = 1 + r

r = √ (882 / 800) - 1

r = 0.05

The rate is 5%.