Question

38.

a.

Judy deposits $7000 into a savings account that earns 5.5% simple interest. How much will be in the account after 5.5 years?

	a.	$9289.65
	b.	$ 9117.5
	c.	$9145.75
	d.	$9285.64

b.

The amount of money $20,000 is loaned for a period of time 6 years 9 months along with the simple interest $14,200 charged. Determine the simple interest rate of the loan.

	a.	10.00%
	b.	10.25%
	c.	10.65%
	d.	10.51%

Answer 1

ANSWER:

A) deposit = $7,000

rate = 5.5%

time = 5.5 years

interest = deposit * rate * time

interest = 7,000 * 5.5% * 5.5

interest = 2,117.5

total amount after 5.5 years = deposit + amount = 7,000 + 2,117.5 = 9,117.5

the correct answer is option b.

B) deposit = $20,000

time = 6 years and 9 months or 6.75 years

simple interest = 14,200

interest = deposit * rate * time

14,200 = 20,000 * rate * 6.75

14,200 = 135,000 * rate

rate = 14,200 / 135,000

rate = 0.1051 or 10.51%

so the correct answer is option d