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Question

for a fixed period of time, interest varied jointly with the principal and the rate of interest. If a principal of $2000 invested at 6% earns $300 in interest, how much interest will a principal of $4000 earn if it is invested at 8% for the same period of time?

Answer 1

The information provided indicates simple interest.

 

If so, the formula for Interest = Principal x Rate x Time

 

Looking at the first data set, we can figure the interest for 1 year by using P = $2000, R = 6%, and T = 1

 

The interest would be $120. Taking that number and dividing it into $300, we get 2.5 years.

 

Looking at the second data set, we will have I = P x R x T with P = $4000, R = 8% (0.08 as a decimal), and T = 2.5 years

 

Thus, I = $4000 x 0.08 x 2.5 = $800