Question
John invests $2500 in an account that pays a rate r compounded annually. If after 2 years the total interest earned is $650, find the approximate rate of interest
Answers
Reiny
let the rate be i, where i is expressed as a decimal
2500(1+i)^2 = 2500+650
(1+i)^2 = 3150/2500 = 1.26
take √ of both sides
1+i = √1.26
1+i = 1.12249
i = .12249
or 12.25% , Wow, I remember those good old days
2500(1+i)^2 = 2500+650
(1+i)^2 = 3150/2500 = 1.26
take √ of both sides
1+i = √1.26
1+i = 1.12249
i = .12249
or 12.25% , Wow, I remember those good old days