Question

A bank says you can do or your money in 10 years if you put 1000 in in a simple interest account.What annual interest rate does the bank Pay?

Answer 1

Answer:

$r=10\%$

Step-by-step explanation:

The correct question is

A bank says you can double your money in 10 years if you put $1,000 in a simple interest account. What annual interest rate does the bank pay?

we know that

The simple interest formula is equal to

$A=P(1+rt)$

where

A is the Final Investment Value

P is the Principal amount of money to be invested

r is the rate of interest  

t is Number of Time Periods

in this problem we have

$t=10\ years\\ P=\ 1,000\\ A=\ 2,000\\r=?$

substitute in the formula above

$2,000=1,000(1+10r)$

Solve for r

Divide by 1,000 both sides

$2=1+10r$

Subtract 1 both sides

$10r=2-1$

$10r=1$

Divide by 10 both sides

$r=1/10$

$r=0.10$

Convert to percentage (multiply by 100)

$r=0.10*100=10\%$