Question

charles deposited $12,000 in the bank. He withdrew $5,000 from his account after one year. If he recives a total amount of $9,340 after 3 years, find the rate of simple interest.

Answer 1

Answer:

The rate of simple interest is 9%

Step-by-step explanation:

* Lets talk about the simple interest

- The simple Interest Equation (Principal + Interest)  is:

  A = P(1 + rt)  , Where

# A = Total amount (principal + interest)

# P = Principal amount

# I = Interest amount

# r = Rate of Interest per year in decimal r = R/100

# R = Rate of Interest per year as a percent R = r * 100

# t = Time period involved in months or years

- The rule of the simple interest is I = Prt

* lets solve the problem

- Charles deposited $12,000

∴ P = $12,000

- He withdrew $5,000 from his account after one year

- He receives a total amount of $9,340 after 3 years

∴ A = $9340 and t = 3

- Lets find the inetrest after 1 year

∵ I = Prt

∵ P = 12000

∵ t = 1

∴ I = 12000(r)(1) = 12000r

- Lets subtract the money that he withdrew

∵ He withdrew $5000

∵ He deposit at first 12000

∴ He has after the withdrew 12000 - 5000 = 7000

- The new P for the next 2 years is 7000

- This amount will take the same rate r for another two years

- The total money is $9340

∵ I = A - P

∵ A = 9340

∵ P = 7000

∴ The amount of interest = 9340 - 7000 = 2340

- The amount of interest after 3 years is 2340

- Lets find the amount of interest in the two years

∴ I = 7000(r × 2) = 14000r

- The amount of interest after the 3 years is the sum of the interest in

  the 1st year and the other 2 years

∴ 2340 = 14000r + 12000r

∴ 2340 = 26000r ⇒ divide both sides bu 2340

∴ r = 2340 ÷ 26000 = 0.09

∵ The rate R in percentage = r × 100

∴ R = 0.09 × 100 = 9%

∴ The rate of simple interest is 9%