Question

Bill Payne visits his local bank to see how long it will take for $1,000 to amount to $1,900 at a simple interest rate of 12 ½%. Provide Bill with the solution to his problem in years

Answer 1

It will take approximately 0.72 years for $1,000 to accumulate to $1,900 at a simple interest rate of 12 ½%.

Step-by-step explanation:

To find out how long it will take for $1,000 to amount to $1,900 at a simple interest rate of 12 ½%, we can use the simple interest formula:

Interest = Principal × Rate × Time

Where:

• Principal is the initial amount of money, which is $1,000 in this case
• Rate is the interest rate as a decimal, which is 12.5% or 0.125
• Time is the number of years it will take for the amount to accumulate, which we need to find out

Substituting the values into the formula:

Interest = $1,900 - $1,000

$1,900 - $1,000 = $900

$900 = $1,000 × 0.125 × Time

To find Time, we can rearrange the formula:

Time = $900 / ($1,000 × 0.125)

Time = 0.72 years

Therefore, it will take approximately 0.72 years for $1,000 to accumulate to $1,900 at a simple interest rate of 12 ½%.

Answer 2

Jim Murphy borrowed $30,000 on 120-day fourteen percent note. Jim paid $5,000 toward the note on day 95. On day 105 he paid an additional $6,000. Using the U.S. Rule, Jim's adjusted balance after the first payment is:Answer:$26,108.33