At the end of 2 years, P dollars invested at an interest rate r compounded annually increases to an amount, A dollars, given by the following formula. Upper A equals Upper P (1 plus r )squared Find the interest rate if $100 increased to $196 in 2 years. Write your answer as a percent.

40%.

Step-by-step explanation:

We have been given that an amount of $100 compounded annually is increased to $196 in 2 years. We are asked to find the interest rate.

We will use compound interest formula to solve our given problem.

, where,

A = Final amount,

P = Principal amount,

r = Annual interest rate in decimal form,

n = Number of times interest is compounded per year,

t = Time in years.

Upon substituting our given values in above formula, we will get:

Take positive square root of both sides:

Since interest rate is in decimal, form, so we will convert it into percentage as:

Therefore, the interest rate was 40%.