simple interest formula

Question

Using the simple interest formula, what is the interest rate on the Taylor family's college fund if they invested $20000 16 years ago and now the account totals $35680? Give your answer to the tenth of a percent. For example, the decimal percent .045 is considered 4.5%

Answer 1

 

 

Let i be the simple interest, so:

 

 

 35,680 - 20,000 = 15,680

 

16* i * 20,00 = 15,680

 

divide both sides by 16 * 20,000:

 

i =(15,680 / 16 * 20,000) = .049 or 4.9%

 

 

 

Answer 2

total now is $35,680

subtract the initial investment of $20,000 from $35,680

$35,680-$20,000=$15,680 in interest

interest=principal*rate*time

15,680=20,000*r*16

15,680=320,000*r

15,680/320,000=r

0.049=r

r =4.9 %

check:i=20,000*0.049*16

          i=$15,680

$20,000+$15,680=$35,680

Answer 3

A =amount; P = principal; R = interest rate; T = number of years

A=P+PRT

R=(A-P)/PT=(35680-20000)/(20000×16)=15680/(20000×16)=.049=4.9%

It beggars the imagination how a family could find simple interest for that long.  Even savings accounts compound.