For the following exercises, use the compound interest formula, displaystyle{A}{left({t}right)}={P}{left({1}+frac{r}{{n}}right)}^{{{n}{t}}}. Use properties of rational exponents to solve the compound interest formula for the interest rate, r.

hexacordoK

hexacordoK

Answered question

2021-01-28

For the following exercises, use the compound interest formula, A(t)=P(1+rn)nt.
Use properties of rational exponents to solve the compound interest formula for the interest rate, r.

Answer & Explanation

Aamina Herring

Aamina Herring

Skilled2021-01-29Added 85 answers

Calculation: 
The compound interest formula is as follows:
A(t)=P(1+rn)nt 
where A(t) denotes the account value, t denotes the number of years, P denotes the account's starting balance, also known as the principal or, more generally, present value, r denotes the annual percentage rate (APR) expressed in decimal form, and n denotes the number of compounding periods in a year.
the might of both sides together 1nt, we get 
A1nt=P(1+rn) 
Divide both sides by P 
A1ntP=(1+rn) 
Substract 1 from both sides 
A1ntP1=rn 
By n-folding both sides, we obtain
n(A1ntP1)=r 
Hence, r=n(A1ntP1)

Jeffrey Jordon

Jeffrey Jordon

Expert2021-10-26Added 2605 answers

Answer is given below (on video)

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