Question

Maggie has $14,100 to invest, and wishes to gain $4,000 in interest over the next eight years. Approximately what is the minimum simple interest rate Maggie needs to reach her goal? a. 2.89% b. 3.55% c. 4.95% d. 5.18%

Answer 1

$14,100 * 8 * i = $4,000
$112,800 * i = $4,000
i = $4,000 / $112,800
i = 0.0355

i = 3.55%

answer is b. 3.55%

Answer 2

Find out the what is the minimum simple interest rate Maggie needs to reach her goal .

To proof

Formula

`Simple\ interest = (principle* rate* time)/(100)`

As given

Maggie has $14,100 to invest, and wishes to gain $4,000 in interest over the next eight years.

put all the values in the formula

`4000 = (14100* rate* 8)/(100)`

Solving

`rate = (4000* 100)/(14100*8)`

solving the above

`rate = (400000)/(112800)`

rate =3.55% (approx)

the minimum simple interest rate Maggie needs to reach her goal is 3.55% .

Option (b) is correct .

Hence proved