1. If you want to earn 15% annual simple interest on an investment, how much sho
ID: 3406990 • Letter: 1
Question
1. If you want to earn 15% annual simple interest on an investment, how much should you pay for a note that will be worth $13500 in 10 months?
2.A student has a savings account earning 9% simple interest. She must pay $1600 for first-semester tuition by Septenber 1 and $1600 for second-semester tuition by January ~~~a. How much must she earn in the summer (by September 1) in order to pay the first-semester bill on time and still have the remainder of the summer earnings grow to $1600 between September 1 and January 1(Round answeer to the nearest cent)
Explanation / Answer
Given that
A=13500,
T=10 months
=10/12 year
Let investment is P
given Interest=I=(15P)/100
we have
I= PTR/100 where R is rate of interest
so,
15P/100 = PTR/100
15P=PTR
15=TR
15=(10/12)(R)
R=18%
we have
A=P(1+(TR/100))
13500=P(1+(10/12)(18)/100)
P=20(13500)/23
= 11739.13
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