Answer:
A. $4,960
B. 8%
C. $120
Step-by-step explanation:
<u>Part A</u>
The amount in the account at the end of 3 years is the original amount ($4000) plus the earned interest ($960). That sum will be ...
$4,000 + 960 = $4,960 . . . account balance
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<u>Part B</u>
The amount of interest is computed using the formula ...
I = Prt
where I is the interest earned, P is the principal invested, r is the annual rate, and t is the number of years. Putting the given values into this equation, we can solve for r:
960 = 4000·r·3
960/12000 = r = 0.08 = 8%
The interest rate was 8%.
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<u>Part C</u>
The additional interest can be computed using the same formula as for part B.
I = Prt
I = 4000·0.01·3 = 120
The additional interest earned at a 1% higher rate would be $120.
