Question

Yesenia invested $50,000 five years ago in a simple interest investment. She now has $55,750. What...

Yesenia invested $50,000 five years ago in a simple interest investment. She now has $55,750. What annual interest rate was her investment earning? Round to the nearest tenth

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Answer #1

Given,

Present value = $55750

Investment 5 years ago = $50000

No. of years (n) = 5 years

Solution :-

Annual interest = (Present value - investment 5 years ago) n

= ($55750 - $50000) 5 years

= $5750 5 years = $1150

Annual interest rate = Annual interest investment 5 years ago

= $1150 $50000 = 0.023 or 2.30%

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