Question

B. Pablo's goal is to have $5,000 after 4 years. Is this possible if he

Answer 1

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%