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26 June, 14:34

Solve:

the sum of $2000 is invested at interest-rate r, compounded annually, in 2 years it grows to $2880. what is the interest rate?

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Answers (1)
  1. 26 June, 16:51
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    The formula we can use is A=P (1+rt)

    A = accumulated value, P=principal, r=rate, t=time (years)

    2880=2000 (1+r*2)

    2880=2000+4000r

    800=4000r

    r=880/4000=0.22

    interest rate 22%
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