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A=(p+i)^n; p+i=A^(1/n) [A^(1/n) is the same as the nth root of A]; i=A^(1/n)-p.

A=2,200, p=200, n=5: i=2200^0.2-200=-195.34 approx.

As a percentage i is-19,534%.

[IMPORTANT NOTE: This problem looks like a variation on the formula for calculating compound interest which is contained in two formulae: A=p(1+r/100)^n and i=A-p, making i=p((1+r/100)^n-1), where r=percentage interest rate for a period, p is the initial amount, A is the total amount after n periods of time, and i is the interest. If this what the question is all about then we can calculate r: A/p=(1+r/100)^n; (A/p)^(1/n)=1+r/100; r=100((A/p)^(1/n)-1); r=100((2200/200)^0.2-1)=61.54% (0.6154 as a decimal); i=A-p=2000, which is 10 times the amount invested.

If the original formula had been A=p(1+i)^n, then i=r/100 and i is not the interest, but the interest rate expressed as a decimal rather than as a percentage, so i=0.6154 when r=61.54%.

In words, the problem could be expressed:

If RM200, invested at compound interest over 5 years, gains 10 times this amount in interest, what is the annual compound percentage interest rate? The answer would be 61.54%.]

 

by Top Rated User (1.1m points)

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