Problema Solution
The formula A=P(1+r)^2 gives the amount A in dollars that P dollars will grow to in 2 years at an interest rate r (where r is given as a decimal),using compound interest. What interest rate will cause $6000 to grow to $6552.15 in 2 years?
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sol.
according to the question P=$6000 and A=$6552.15
by formula of amount the equation formed will be
A=P(1+r)^2
=> 6552.15 = 6000(1+r)^2
=> 6552.15/6000 = (1+r)^2
=> 1.092 = (1+r)^2
=> (1+r) = 1.045
=> r = 0.045 i.e 4.5% per annum