Max has $2,000 he would like to invest in an account that pays simple interest. Max would like to earn a total of $650 in intere

Question

2 years ago

15

Max has $2,000 he would like to invest in an account that pays simple interest. Max would like to earn a total of $650 in intere

st over the next five years. He does not plan on making any additional deposits of withdrawals to the account. What annual interest rate must Max receive?

Mathematics

1 answer:

Goryan [66] · Answer 1 · 2022-10-25T04:19:42+03:00

Goryan [66]2 years ago

7 0

Answer: 6.5%

Step-by-step explanation:

Formula for simple interest : I = Prt , where P= principal , r= rate of interest t= time

As per given , P = $2000 , I=$ 650, t= 5 years

Substitute all theses values in the formula , we get

$650=2000\times r\times5\\\\\Rightarrow\ r=\dfrac{650}{2000\times5}\\\\\Rightarrow\ \dfrac{65}{1000}\\\\\Rightarrow\ r=0.065 =0.065\times100\%=6.5\%$

Hence, the required annual interest = 6.5%