Question

12.

If $4204 is invested at 4% per year simple interest for 7 years, at what simple interest rate r would it need to be
invested for 5 years to earn the same amount of interest? Express r as a percentage correct to 2 decimal places.

Answer 1

The answer to this question is in the picture which is 0.56% to 2dp

Answer 2

5.60%

Explanation:

We can use the formula for simple interest to solve this problem. The formula is:

`\boxed{\bold{SI =( P * T* R)/(100)}}`

Where:

• SI is the simple interest earned
• P is the principal amount invested
• R is the interest rate
• T is the time period in years

If $4204 is invested at 4% per year simple interest for 7 years, the interest earned will be:

`SI = (4204 *4* 7)/(100) = 1177.12`

In order to earn the same amount of interest of $1177.12, the investment of $4204 must be invested for 5 years at a simple interest rate of:

`1177.12=(4204*5*r)/(100)`

Doing Criss cross multiplication

`r=(1177.12*100)/(4204*5)`

r=5.60 %

To two decimal places, the interest rate r is 5.60 %.