Question

Over two summers, Ray saved $900 and $500. The polynomial 900x2 + 500x represents his savings at the beginning of the third year, where x is the growth factor. (The interest rate r is x - 1.) What is the interest rate he needs to start the third year with $1600 in savings?

Answer 1

900x^2 + 500x = 1600
900x^2 + 500x - 1600 = 0
9x^2 + 5x - 16 = 0
x = 1.084
r = x - 1 = 1.084 - 1 = 0.084
Interest rate = 8.4%