Question

At what rate would you need to invest $12000 and make $2880 after 8 years?

Answer 1

`3\%`

Explanation:

we know that

The simple interest formula is equal to

`I=P(rt)`

where

I is the Final Interest Value

P is the Principal amount of money to be invested

r is the rate of interest

t is Number of Time Periods

in this problem we have

`t=8\ years\\ P=\$12,000\\I=\$2,880\\r=?`

substitute in the formula above

`2,880=12,000(8r)`

Solve for t

`2,880=96,000(r)`

`r=2,880/96,000`

`r=0.03`

Convert to percent form

`0.03*100=3\%`