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avatar+1112 

Find the interest for each statement. 

 

You invest $400 for four years at 8% annual interest.

 

 

John invests $8437 at 5 1/2 (that is a mixed fraction- five and a half) interest for 6 months.

 Mar 29, 2019
 #1
avatar+18274 
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amount x interest x years  = amount earned         + original amount is the amount you would have at end of 4 years....

  thei simplifies to   amount x (1 +( interest x years))

                                  400    x (1+(.08 x 4))  =   400 x 1.32 = .......

 

John's scenario:

                 8437 x (1+(.055 x 1/2)) = .......             .055 is annual interest of 5 1/2%    the 1/2 is because it is only for 1/2 year

 Mar 29, 2019
edited by ElectricPavlov  Mar 29, 2019
 #2
avatar+1112 
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it looks like the answer is wrong. Do you know why?

SmartMathMan  Mar 29, 2019
edited by Guest  Mar 29, 2019
 #3
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EP calculated the first one on the basis of "simple interest". In other words, "not compounded"

 

If you compound it, then you would have:

$400 x 1.08^4 = $544.20

$544.20 - $400 =$144.20 - interest earned on the investment.

 Mar 29, 2019

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