Question

Alexis put $2000 in a savings account. After 4 years, she had $2543 in the account. What rate of interest did she earn? Use the formula A= Pe^rt, where A is the ending amount, P is the principal (initial amount), r is the interest rate, and t is time.

Answer 1

This is substitution, it's very simple once you get the hang of it!

okay, what you want to do is plug in the numbers you already have, to get the number you don't have(r).

First, you plug in the numbers.

1. P= $2000
A=$2543
t= 4(years)
r=?

2543=2000^r(4)

Secondly, you want to solve the equation.

Answer 2

Rate of interest = 6%

Explanation:

Alexis put $2000 in a savings account. After 4 years, she had $2543 in the account.

Use the formula,

`A=Pe^(rt)`

`P\rightarrow \$2000`

`r\rightarrow ?`

`A\rightarrow \$2543`

`t\rightarrow 4\text{ years}`

Substitute the value into formula and solve r

`2543=2000e^(4r)`

`e^(4r)=1.2715`

Apply ln both sides

`4r\ln(e)=\ln(1.2715)`

`r=0.06`

Rate of interest = 6%

Hence, The rate of interest is 6%