Question

Investment of $1,000 at 16% simple interest for 20 years

a. 1%
b.1.25%
c.10%
d.12.5%

Answer 1

so, the bank is asking for 1000, and in 10 years they'd be doubled, meaning they'd be 2000, then,


`\bf ~~~~~~ \textit{Simple Interest Earned Amount}\\\\ A=P(1+rt)\qquad \begin{cases} A=\textit{accumulated amount}\to &\$2000\\ P=\textit{original amount deposited}\to& \$1000\\ r=rate\to r\%\to (r)/(100)\\ t=years\to &10 \end{cases} \\\\\\ 2000=1000(1+r\cdot 10)\implies \cfrac{2000}{1000}=1+10r\implies 2=1+10r \\\\\\ 1=10r\implies \cfrac{1}{10}=r\implies r\%=100\cdot \cfrac{1}{10}\implies r=\stackrel{\%}{10}`