Question

Joan invested $1420 at the start of the year and found she had $1621.40 at the end of the year. what is the annual effective yield of her investment

Answer 1

you can easily solve this by using a rule of three.

Step 1

let

1420 = 100 %

x=the % at the end of the year

then

at the end of the year, she had

1621.4 = x %

Step 2

make the relation and solve for x

`\begin{gathered} (1420)/(100)=(1621)/(x) \\ \text{solve for x} \\ 1\cdot1420x=1621\cdot100 \\ 1420x=162100 \\ x=(162100)/(1420) \\ x=114.1549 \end{gathered}`

so, at the end of the year she had 114.15 %

Step 3

find the yield

`\begin{gathered} \text{Yield}=\text{ final percentage-100\%} \\ \text{Yield}=114.15\text{ -100} \\ \text{Yield}=14.15 \end{gathered}`

so, the answer is 14.15 %