Answer:
The growth rate is 7.2%
Step-by-step explanation:
First thing we need to do here is to set up an exponential equation;
This can be written as follows;
F = I(1 + r)^t
where F is the future value = 20,000
I is the initial value = 10,000
r is the rate in percent which we want to calculate
t is time in years = 10 years
Substituting the values in the question into the exponential equation, we have;
20,000 = 10,000(1 + r)^10
divide both side by 10,000
2 = (1+r)^10
Find the 10th root of both sides
1+ r = 2^(1/10)
1 + r = 1.07177346254
r = 1.07177346254-1 = 0.07177346253
Let’s approximate r as 0.072
Now this to percentage?
That would be 72/1000 * 100% = 7.2%
