2 and 3/4 x 1 and 1/3
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<span>Since the type of interest is not listed: simple interest, 18.75%; compound interest, 6.8%.
Explanation<span>:
For simple interest, the formula is I=prt, where I is the amount of interest earned, p is the amount of principal invested, r is the interest rate as a decimal number, and t is the amount of time.
Our amount of interest earned is 1,750,000-280,000=1,470,000. Our principal is 280,000 and our time is 28 years:
1470000=280000(r)(28)
1470000=7840000r.
Divide both dies by 7840000:
1470000/7840000 = 7840000r/7840000
0.1875 = r.
For compound interest, the formula is
</span></span>
,<span><span>
where A is the total amount in the account, p is the amount of principal, r is the interest rate as a decimal number, and t is the amount of time.
Our total amount is 1,750,000, our principal is 280,000, and our time is 28: 1750000=280000(1+r)</span></span>²⁸<span><span>.
Divide both sides by 280,000:
1750000/280000 = (280000(1+r)</span></span>²⁸<span><span>)/280000
6.25=(1+r)</span></span>²⁸<span><span>.
To take the 28th root, we raise both sides to the 1/28 power: (1+r)=6.25^(1/28)
1+r = 1.0676.
Subtract 1 from both sides:
1+r-1=1.0676-1
r=0.0676, which rounds to 0.068.</span></span>
Explanation<span>:
For simple interest, the formula is I=prt, where I is the amount of interest earned, p is the amount of principal invested, r is the interest rate as a decimal number, and t is the amount of time.
Our amount of interest earned is 1,750,000-280,000=1,470,000. Our principal is 280,000 and our time is 28 years:
1470000=280000(r)(28)
1470000=7840000r.
Divide both dies by 7840000:
1470000/7840000 = 7840000r/7840000
0.1875 = r.
For compound interest, the formula is
</span></span>
where A is the total amount in the account, p is the amount of principal, r is the interest rate as a decimal number, and t is the amount of time.
Our total amount is 1,750,000, our principal is 280,000, and our time is 28: 1750000=280000(1+r)</span></span>²⁸<span><span>.
Divide both sides by 280,000:
1750000/280000 = (280000(1+r)</span></span>²⁸<span><span>)/280000
6.25=(1+r)</span></span>²⁸<span><span>.
To take the 28th root, we raise both sides to the 1/28 power: (1+r)=6.25^(1/28)
1+r = 1.0676.
Subtract 1 from both sides:
1+r-1=1.0676-1
r=0.0676, which rounds to 0.068.</span></span>