Question

What is the rate at which $13,824 compounded annually grows to $20,184 in 2 years.

Answer 1

P = principal amount = $13,824
t = time = 2 years
A = final amount = $20,184

$20,184 = ($13,824)(1 + r)^2
(1 + r)^2 = $20,184/$13,824
(1 + r)^2 = about 1.46
1 + r =
`√(1.46)`
1 + r = about 1.2
r = 1.2 - 1
r = 0.2

so about 20% annually