Question

The interest rate r required to increase your investment p to the amount a in t years found by r= (a/p)^(1/t) -1. Find the interest rate r for p = 8100, a= 10,000, and t=2. A. 111.11% B. 1.11% C. 0.11% D. 11.11%

Answer 1

$\bf r=\left( \frac{a}{p} \right)^{\frac{1}{t}}~~ \begin{cases} p=8100\\ a=10000\\ t=2 \end{cases}\implies r=\left( \cfrac{10000}{8100} \right)^{\frac{1}{2}}\implies r=\sqrt{\cfrac{10000}{8100}} \\\\\\ r=\sqrt{\cfrac{100}{81}}\implies r=\cfrac{\sqrt{100}}{\sqrt{81}}\implies r=\cfrac{10}{9}\implies r\approx \stackrel{\%}{1.11}$

Answer 2

Answer:

0.11%

Step-by-step explanation:

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