1. Calculate the simple interest of a $2000 loan with the interest of 10% per ye
ID: 1137303 • Letter: 1
Question
1. Calculate the simple interest of a $2000 loan with the interest of 10% per year. The duration of the loan is 2 years. 2, Sara has $65 in an account that earns 2.5% per year. The interest is not compounded. How muclh interest will she earn in 3 years? 3. A sum of money at simple intcrmunts to 735 in 3 years and to 780 in 4 years. The sum is: 4 Mr. Livas invested an amount of 15,900 divided in two schemes X and Y at the simple interest rate of 15% p.a. and 12% p.a. respectively. If the total amount of simple interest earned in 2 years be 4200, what was the amount invested in Scheme Y? 5 A sum fetched a total simple interest of 5020 at the rate of 8 %.p.a. in 5 years. What is the sum? 6 What will be the compound interest on a sum of $15,000 after 3 years at the rate of 14% per year? 7. What is the equivalent worth of S3000, 4 years from now with interest rate 6%? 8. Investing in stock market Mr. James received S10000 after 5 years. Assume Rate of return per years is 8%. How much Mr James invested?Explanation / Answer
1) SI = P x R x T = 2000 x 10% x 2 = $400
2) SI = P x R x T = 65 x 2.5% x 3 = $4.875
3) We have SI = 780 – 735 = $45. Then we use SI for 3 years = 45*3 = $135. Hence we have P = A – SI = 735 – 135 = $600.
5) SI = P x R x T
5020 = P x 8% x 5
P = 5020/8%*5 = $12,550
6) CI = A – P = P(1 + r%)^n – P = 15000(1 + 14%)^3 – 15000 = 7223.16
7) A = 3000*(1 + 6%)^4 = $3,787.43
8) A = P(1 + r%)^n or 10000 = P(1 + 8%)^5 which gives P = 10000/((1 + 8%)^5) = $6085.832
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