Complete question is;
If Pablo invests $4200 for 3 years and earns $630
A) what is the simple interest rate?
B) Pablo’s goal is to have $5000 after 4 years. Is it possible with a rate of 6%? Explain.
Answer:
A) Rate = 5%
B) Yes, it is possible for him to earn $5000 after 4 years with an interest rate of 6%
Step-by-step explanation:
A) Formula for interest is;
i = PRT
We are given;
i = 630
P = 4200
T = 3
Making R the subject;
R = i/PT
R = 630/(4200 × 3)
R = 0.05
This is 5%
B) Formula for value of principal after interest period is;
A = P(1 + RT)
P = 4200
R = 6% = 0.06
T = 4 years
Thus;
A = 4200(1 + (0.06 × 4))
A = $5208
Thus, it is possible for him to earn $5000 after 4 years with an interest rate of 6%
