Question

Nakato Nobuki, a Japanese artist, intends to withdraw $ 24,000.00 from his savings at the end of 5 years. Mr. Nobuki deposits $ 1,500.00 in savings annually and today has a balance of $ 8,000.00. What should be the savings interest rate for Nobuki to achieve his goals?

Answer 1

The savings interest rate of Nakato Nobuki is 3 %

Explanation:

Given;

Final amount of Nakato Nobuki, A = $ 24,000.00

time period of his investment, t = 5 years

principla amount, P = $ 1,500.00

The savings interest rate of Nakato Nobuki can be calculated on a simple interest basis.

A = P(1 + rt)

r is the savings interest rate

Substitute the given values and solve for r

24,000 = 1,500(1 + 5r)

24,000 = 1,500 + 7,500r

7,500r = 24,000 - 1,500

7,500r = 22,500

r = 22,500/7,500

r = 3 %

Therefore, the savings interest rate of Nakato Nobuki is 3 %