Answer
$9\% = r$
Work Step by Step
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 $A=\$5900$, $P=\$5000$, and $t=2$, to obtain:
$\$5900 = \$5000(1+r \cdot 2)
\\\$5900 = \$5000(1+2r)$
Divide $\$5000$ on both sides of the equation to obtain:
$\frac{5900}{5000} = 1+2r
\\1.18 = 1+2r$
Subtract $1$ on both sides of the equation to obtain:
$0.18 = 2r
\\\frac{0.18}{2}=r
\\0.09=r$
Convert to percent to obtain:
$9\% = r$
