Question

7) At what rate would you need to invest $12000 and make $2880 after 8 years?

Answer 1

Answer:

The interest rate is 19.5%.          

Step-by-step explanation:

Given : Invest $12000 and make $2880 after 8 years.

To find : At what rate would you need to invest?

Solution :

Applying interest formula,

$A=P(1+r)^t$

Where,

A is the amount  A=$12000

P is the principal P=$2880

t is the time t=8 years

r is the interest rate

Substitute the value in the formula,

$12000=2880(1+r)^8$

$\frac{12000}{2880}=(1+r)^8$

$4.16=(1+r)^8$

$(4.16)^\frac{1}{8}=(1+r)$

$1.195=1+r$

$1.195-1=r$

$0.195=r$

In percentage, $r=0.195\times 100$

$r=19.5\%$

Therefore, The interest rate is 19.5%.

Answer 2

Answer:

The rate of interest is 2.72%

Step-by-step explanation:

Principal = $12000

Interest = $2880

Amount = Principal + Interest

Amount = 12000+2880

Amount = 14880

Time = 8 years

Formula : $A=P(1+r)^t$

A = amount

P = Principal

r = rate

t = time

Substitute the values in the formula :

$14880=12000(1+r)^8$

$\frac{14880}{12000}=(1+r)^8$

$\sqrt{8}[\frac{14880}{12000}]=(1+r)$

$1.02725=(1+r)$

$1.02725-1=r$

$0.02725=r$

Rate of interest = 2.72%

Hence the rate of interest is 2.72%