Yvonne put $4,000 in a savings account. at the end of 3 years, the account had earned $960 in simple interest. a. how much does she have in her account at the end of the three years? b. At what anual simple interest rate did the account grow? show your work.

c. how many more dollars would she have in her account if the interest rate were 1% greater?

Question

Mathematics

Kolby Dennis

11 June, 10:57

Yvonne put $4,000 in a savings account. at the end of 3 years, the account had earned $960 in simple interest. a. how much does she have in her account at the end of the three years? b. At what anual simple interest rate did the account grow? show your work.

c. how many more dollars would she have in her account if the interest rate were 1% greater?

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Answers (1)

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Roman Farmer · Answer 1

A) At the end of 3 years the amount in the account = Principal + Interest

Amount = 4000 + 960 = 4960

Amount at the end of 3 years = $4960

b) Formula for Rate, R = 100I / (PT)

Where I = Interest = 960, P = Principal = 4000, T = Time = 3 years

R = (100 * 960) / (4000 * 3)

R = 8

Rate, R = 8% per annum.

c) If the rate was 1% more, R = 8 + 1 = 9% per annum

Interest, I = PRT/100

Interest, I = 4000 * 9 * 3 / 100 = 1080

Amount in her account would have been = $4000 + $1080 = $5080

Amount more = $5080 - $4960 = $120

She would have had $120 more should the rate were 1% greater.