Intermediate Algebra: Connecting Concepts through Application

Published by Brooks Cole
ISBN 10: 0-53449-636-9
ISBN 13: 978-0-53449-636-4

Chapter 4 - Quadratic Functions - 4.4 Solving Quadratic Equations by the Square Root Property and Completing the Square - 4.4 Exercises - Page 348: 45

Answer

$6.1\%$

Work Step by Step

$$\begin{aligned} P(1+r)^t&= A\\ 800(1+r)^2&=900 && \text{Let }P=800\text{ and }t=2.\\ (1+r)^2&= \frac{900}{800}\\ (1+r)^2&=\frac{9}{8} && \text {Take the square root of both sides.}\\ 1+r&= \pm\sqrt{\frac{9}{8}}\\ r&=\pm\frac{3}{\sqrt{8}}-1\\ r&=\frac{3}{2\sqrt{2}}-1 \\ r& = 0.061= 6.1\% \end{aligned}$$ We took only the positive value since $r$ must be positive for the money to grow. The required interest rate is about $6.1\%$.
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