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evablogger
1 day ago
5

On July 1, 1990, John invested $300 in an account that earned 8% simple interest. On July 1, 1993 he closed this account and dep

osited the liquidated funds in a new account earning q% simple discount. On July 1, 1998, John had a balance of $520 in the simple discount account. How much interest did he earn between July 1, 1993 and July 1, 1994?
Business
1 answer:
marusya05 [3.4K]1 day ago
7 0

Response:

The interest rate is 5.7%          $21.204

Clarification:

The formula for calculating simple interest is

I =

\frac{P*R*T}{100}

Given that

I = Interest, T = time;;R is rate; P = principal

John earned this interest by July 1, 1993 as follows:

           I = \frac{300*1* 8}{100} = 72

Consequently, the total amount in John's account by July 1, 1993 would then be

= $300 + $72= $372

This indicates he utilized these funds at an interest rate of q.

On July 1, 1998, John’s total was $520, meaning the interest accumulated in these five years equals $520 - $372 = $148.

Using the simple interest formula: Interest = PRT/100

148 =

\frac{520*5*q }{100}        = 14,800 =2600q

       q = \frac{14,800}{2,600}

Thus, the rate is found to be 5.7%

The interest amount between July 1, 1993, and July 1, 1994 calculates as

    I = \frac{PRT}{100} = \frac{372*5.7*1}{100}

          = $21.204

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