Question

If you want to make $863 by investing $5760 for five years in an account that pays simple interest what interest rate would you need to achieve your goal?

Answer 1

Answer:

The rate is about 22.9%

Step-by-step explanation:

Simple Interest is given as:

`I=\frac{\text{PRT}}{100}`

Where P is the principal, R is the rate, and T is the time.

To make $863 in five years by investing $5760 (Principal), the total amount made must be

$863 + $5760 = $6623

Using these values, we can find the rate

`\begin{gathered} 6623=(5760* R*5)/(100) \\ \\ R=(6623*100)/(5760*5)=(662300)/(28800)=22.997 \end{gathered}`