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To find the total amount $T including simple interest, the rule is T = P(1 + RN). C

a Use this rule to find the total amount after 10 years if $30 000 is invested at 7% p.a.
b Use the rule to find the time that it takes for an investment to grow from $18 000 to $22 320 invested at 6% p.a. simple interest.

User Rarw
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a) Using the formula T = P(1 + RN), where P is the principal, R is the annual interest rate, N is the number of years, and T is the total amount including simple interest:

T = $30,000(1 + 0.07 × 10)

T = $30,000(1.7)

T = $51,000

Therefore, the total amount after 10 years if $30,000 is invested at 7% p.a. is $51,000.

b) Using the same formula, we can solve for the number of years (N) needed for an investment of $18,000 to grow to $22,320 at 6% p.a. simple interest:

$22,320 = $18,000(1 + 0.06N)

1.24 = 1 + 0.06N

0.24 = 0.06N

N = 4

Therefore, it takes 4 years for an investment of $18,000 to grow to $22,320 at 6% p.a. simple interest.

User Andrea Rosales
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