Question

You invest $2000 at an interest rate that is compound annually after 5 years, your principal has increased to $2262.82 what is the interest rate? Round to one decimal place.

Answer 1

2.5%

Explanation:

2262.82 = 2000(1 + r)^5

(1+r)^5 = 1.13141

1+r = 1.025

r = .025

r = 2.5%