Question

You are saving money to buy a used car. You deposit $2,500 in an account that earns interest compounded annually. The expression 2500(1+r)^2 represents the balance after 2 years, where r is the annual interest rate in decimal form

Answer 1

Answer:

$r= [(\frac{A}{2500}) ^\frac{1}{2} -1]$

Step-by-step explanation:

Given data

Principal = $2500

time t= 2 years

Required

the rate r

Given the expression for the balance 2500(1+r)^2

Hence

$A= 2500(1+r)^2$

we can make r subject of formula

$r= [(\frac{A}{P}) ^\frac{1}{t} -1]$

$r= [(\frac{A}{2500}) ^\frac{1}{2} -1]$

Hence, for any value of A, we can find the rate using the expression above