## Thinking Mathematically (6th Edition)

$20.3\% = r$
RECALL: The formula for the future value $A$ is: $A=P(1+rt)$ where P= principal amount borrowed r = interest rate per year t = time in years Use the formula above, with $A=\$14060$,$P=\$10000$, and $t=2$, to obtain: $\$14060 = \$10000(1+r \cdot 2) \\\$14060 = \$10000(1+2r)$ Divide $\$10000$on both sides of the equation to obtain:$\frac{14060}{10000} = 1+2r \\1.406 = 1+2r$Subtract$1$on both sides of the equation to obtain:$0.406 = 2r \\\frac{0.406}{2}=r \\0.203=r$Convert to percent to obtain:$20.3\% = r\$