Question

How much interest (in dollars) will Alex receive after 2 years if he deposited $14,000 in the bank at 3.5% annual interest rate? Davit received $870 as an interest for money invested in Foreign Exchange Market three years ago. How much money did he invest, if the annual interest was 4%. For starting a new business, Arthur borrowed $23000 and calculated $3450 interest for five years. What annual interest was considered?

Answer 1

Answer:

a) Interest = $980

b) Principal = $7250

c) Interest rate = 3%

Step-by-step explanation:

a) For Alex

How much interest (in dollars) will Alex receive after 2 years if he deposited $14,000 in the bank at 3.5% annual interest rate?

The formula for Simple Interest = PRT

Where

P = Principal = $14,000

R = Interest rate = 3.5% = 0.035

T = Time = 2 years

I = $14,000 × 0.035 × 2

I = $980

b) For Davit

Davit received $870 as an interest for money invested in Foreign Exchange Market three years ago. How much money did he invest, if the annual interest was 4%

The formula for Simple Interest = PRT

Where

P = Principal = ?

R = Interest rate = 4% = 0.04

I = $870

T = 3 years

years

Solving for P

P = I/RT

P = $870/0.04 × 3

P = $870/0.12

P = $7250

c) For Arthur

. For starting a new business, Arthur borrowed $23000 and calculated $3450 interest for five years. What annual interest was considered?

The formula for Simple Interest = PRT

Where

P = Principal = $23,000

R = Interest rate = ?

I = $3450

T = 5 years

years

We are Solving for R

R = I/PT

R = $3450/$23,000× 5

R = 3450/115000

R = 0.03

Converting to percentage

= 0.03 × 100

= 3%