Respuesta :
Answer:
The simple interest rate is 5%.
This is possible with a rate of 6%, since in this case, his amount earned will be $5,208.
Step-by-step explanation:
This is a simple interest problem.
The simple interest formula is given by:
[tex]E = P*I*t[/tex]
In which E is the amount of interest earned, P is the principal(the initial amount of money), I is the interest rate(yearly, as a decimal) and t is the time.
After t years, the total amount of money is:
[tex]T = E + P[/tex]
Joshua has $4,200 to invest for college. If Joshua invests $4,200 for 3 years and earns $630, what is the simple interest rate?
We have that [tex]P = 4200, E = 630, t = 3[/tex]. We have to find I.
[tex]E = P*I*t[/tex]
[tex]630 = 4200*I*3[/tex]
[tex]I = \frac{630}{4200*3}[/tex]
[tex]I = 0.05[/tex]
The simple interest rate is 5%.
Joshua’s goal is to have $5,000 after 4 years. Is this possible if he invests with a rate of return of 6%?
We have to find T when [tex]P = 4200, t = 4, I = 0.06[/tex]
So
[tex]E = P*I*t[/tex]
[tex]E = 4200*0.06*4[/tex]
[tex]E = 1008[/tex]
[tex]T = E + P = 4200 + 1008 = 5208[/tex]
This is possible with a rate of 6%, since in this case, his amount earned will be $5,208.
