Posted by Faith on .
I know that I posted a similar question yesterday, but I am still confused about how to solve this.
$1000 grows to $1440 in 2 years.
My teacher taught us a way that involved square roots. Please help if you can! Thank you soo much!
1440/1000 = 1.44 = (1+i)^2
1 + i = sqrt(1.44) = 1.2
i = 0.2 or 20% compound annual interest
The taking of a square root only works if the time on deposit is two years.