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college algebra

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John invests $2500 in an account that pays a rate r compounded annually. If after 2 years the total interest earned is $650, find the approximate rate of interest

  • college algebra - ,

    let the rate be i, where i is expressed as a decimal

    2500(1+i)^2 = 2500+650
    (1+i)^2 = 3150/2500 = 1.26
    take √ of both sides
    1+i = √1.26
    1+i = 1.12249
    i = .12249

    or 12.25% , Wow, I remember those good old days

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