# Thread: interest rate.

1. ## interest rate.

could anyone help me with this problem, i don't know what formula to use.
also i have no idea how to solve this problem either.

2. ## Re: interest rate.

Originally Posted by ConfusedStudent
could anyone help me with this problem, i don't know what formula to use.
also i have no idea how to solve this problem either.

You do this word problem like every other word problem. First, write down the symbols that represent the unknowns. Second, write down in mathematical form the relevant information explicitly given in words by the problem itself and any relevant information known from general knowledge. Then you solve the resulting pure math question. Do that for every word problem, and they will present few difficulties.

What is unknown? The percentage rate of annual inflation. Call it g. What is the number of years? Call it n. What is the price after n years? Call it f. What is the price now? Call it p. You are done with the first step of naming.

What are you expected to know? This formula.

$f = p * \left(1 + \dfrac{g}{100}\right)^n.$ And what does the problem tell you explicitly. $p = 18000.$

In the first problem, you are asked to find g given that $f = 2p\ and\ n = 11.$

So after you solve that problem and know g, you are asked to find f given that $n = 4.$

From this point it is just plug and chug.