Question

Petra invests $8000 for 4 years she earned $2000 as compound interest find rate of interest

Answer 1

r = 5.74%

Explanation:

Compound interest formula is expressed as;

A = P(1+r)^t

P is the principal = $8000

A = P+I =8000 + 2000 = $10000

time t = 4years

Substitute

10000 = 8000(1+r)^4

10000/8000 = (1+r)^4

10/8 = (1+r)^4

1.25 = (1+r)^4

1.05737126344 = 1+r

r = 1.05737126344 - 1

r = 0.05737126344

r = 5.74%

This gives the rate of interest