Question

Maggie has $14,100 to invest, and wishes to gain $4,000 in interest over the next eight years. Approximately what is the minimum simple interest rate Maggie needs to reach her goal? a. 2.89% b. 3.55% c. 4.95% d. 5.18%

Answer 1

Answer

Find out the what is the minimum simple interest rate Maggie needs to reach her goal .

To proof

Formula

$Simple\ interest = \frac{principle\times rate\times time}{100}$

As given

Maggie has $14,100 to invest, and wishes to gain $4,000 in interest over the next eight years.

put all the values in the formula

$4000 = \frac{14100\times rate\times 8}{100}$

Solving

$rate = \frac{4000\times 100}{14100\times8}$

solving the above

$rate = \frac{400000}{112800}$

rate =3.55% (approx)

the minimum simple interest rate Maggie needs to reach her goal is 3.55% .

Option (b) is correct .

Hence proved

Answer 2

$14,100 * 8 * i = $4,000 
$112,800 * i = $4,000 
i = $4,000  /  $112,800
i = 0.0355

i = 3.55%

answer is b. 3.55%