Question

Guided Practice

Suppose you have $500 to deposit into an account. Your goal is to have $595 in that account at the end of the second year. The formula r=
`√(A/P)` - 1 gives the interest rate r that will allow principal P to grow into amount A in two years, if the interest is compounded annually. Use the formula to find the interest rate you would need to meet your goal.



A.

19%



B.

9.1%



C.

8.4%

Answer 1

9.1%

Explanation:

I confirmed it in grandpoint

Answer 2

B. 9.1%

Explanation:

r= A P −1  = 595 500 −1  ≈0.091 You would need an interest rate of 9.1% to meet your goal.