What interest rate will cause \$5000 to grow to \$5618.00 in 2 years
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# What interest rate will cause \$5000 to grow to \$5618.00 in 2 years

[From: ] [author: ] [Date: 11-05-25] [Hit: ]
1 + i = 1.i = 0.5618.1.1.r = .......
The formula A=P(1+r)^2 gives the amount A in dollars that P dollars will grow to in 2 years at interest rate r (where r is given as a decimal), using compound interest. What interest rate will cause \$5000 to grow to \$5618.00 in 2 years?
The interest rate is ___%

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5618 = 5000*(1 + i)^2

5618/5000 = (1 + i)^2

1.1236 = (1 + i)^2

ln(1.1236) = 2*ln(1 + i)

ln(1 + i) = ln(1.1236)/2

ln(1 + i) = 0.0582689081

antiln(1 + i) = antiln(0.0582689081)

1 + i = 1.06

i = 0.06*100 = 6%

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Set up an equation to solve for r
5618.00 = 5000(1 + r)^2
1.1236 = (1 + r)^2
1.06 = 1 + r
r = .06
r = 6%
1
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