Find the interest rate

Question

The formula A = P(1+ r)^2 gives the amount A in dollars that P dollars will grow to in 2 years at interest rate r (where r is given as a decimal), using compound interest . What interest rate will cause $5,000 to grow to $5408 in 2 years?

Answer 1

5408 = 5000(1 + r)²

1.0816 = (1 + r)²

1.04 = 1 + r

0.04 = r