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

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

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%

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
1a) Lucy invested $950 five years ago. Her investment paid 7.2% interest compounded monthly. Lucy's twin...
1a) Lucy invested $950 five years ago. Her investment paid 7.2% interest compounded monthly. Lucy's twin sister Laurie invested $900 at the same time. But Laurie's investment earned 8% interest compounded quarterly. How much is each investment worth today? 1b) Carl is considering the purchase of an investment that will pay him $12,500 in 12 years. If Carl wants to earn a return equal to 7% per year (annual compounding), what is the minimum amount he should be willing to...
Fifteen years ago, you deposited $12,500 into an investment fund. Five years ago, you added an...
Fifteen years ago, you deposited $12,500 into an investment fund. Five years ago, you added an additional $20,000 to that account. You earned 8%, compounded semi-annually, for the first ten years, and 6.5%, compounded annually, for the last five years. Required: a) What is the effective annual interest rate (EAR) you would get for your investment in the first 10 years? b) How much money do you have in your account today? c) If you wish to have $85,000 now,...
Fifteen years ago, you deposited $12,500 into an investment fund. Five years ago, you added an...
Fifteen years ago, you deposited $12,500 into an investment fund. Five years ago, you added an additional $20,000 to that account. You earned 8%, compounded semi-annually, for the first ten years, and 6.5%, compounded annually, for the last five years. Required: 1. a) What is the effective annual interest rate (EAR) you would get for your investment in the first 10 years? 2. b) How much money do you have in your account today? 3. c) If you wish to...
1. Calculate the future value of an investment worth $2800 that pays 1.5% simple interest rate...
1. Calculate the future value of an investment worth $2800 that pays 1.5% simple interest rate after 4 years. 2. Derek invested $1000. What would that money grow to in 18 months at a 5% annual simple interest rate? 3. If I put $2500 into my saving account and earned $250 of interest at 5% annual simple interest, how long was my money in the bank? 4. Geneva wants to save $12,000 to buy a new car. She just received...
Five years ago you invested $18481 at a 5% market interest rate. If the inflation rate...
Five years ago you invested $18481 at a 5% market interest rate. If the inflation rate is 3%, what is the current constant dollar value of your investment? Enter your answer with 2 decimal places. Do not enter the $ symbol or the comma separator.
Karen made an investment of $2500 two years ago to go on a trip. She invested...
Karen made an investment of $2500 two years ago to go on a trip. She invested the money at 7.2% per annum compounded semi-annually. Her investment will mature in three years. Dwayne would also like to go on the trip. However, he hasn’t started saving yet. How much must he invest today at 9.6% per annum compounded monthly to have the same amount as Karen will have three years from now?
Ten years ago, Hailey invested $1,500 and locked in an annual interest rate of 9 percent...
Ten years ago, Hailey invested $1,500 and locked in an annual interest rate of 9 percent for 30 years (ending 20 years from now). Aidan can make a 20 year investment today and lock in an interest rate of 10 percent. How much money should he invest now in order to have the same amount of money in 20 years as Hailey
2 year(s) ago, Mary invested 32,663 dollars. She has earned and will earn compound interest of...
2 year(s) ago, Mary invested 32,663 dollars. She has earned and will earn compound interest of 9.95 percent per year. In 1 year(s) from today, Albert can make an investment and earn simple interest of 4.91 percent per year. If Albert wants to have as much in 6 years from today as Mary will have in 6 years from today, then how much should Albert invest in 1 year(s) from today? 1 year(s) ago, Goran invested 56,351 dollars. He has...
3 year(s) ago, Vivian invested 38,683 dollars. She has earned and will earn compound interest of...
3 year(s) ago, Vivian invested 38,683 dollars. She has earned and will earn compound interest of 11.87 percent per year. In 3 year(s) from today, Vince can make an investment and earn simple interest of 13.17 percent per year. If Vince wants to have as much in 7 years from today as Vivian will have in 7 years from today, then how much should Vince invest in 3 year(s) from today? 2 year(s) ago, Liam invested 64,777 dollars. He has...
Four years ago, Saul invested $500. Three years ago, Trek invested $600. Today, these two investments...
Four years ago, Saul invested $500. Three years ago, Trek invested $600. Today, these two investments are each worth $800. Assume each account continues to earn its respective rate of return. Which one of the following statements is correct concerning these investments? Please show your reasonings. A) Three years from today, Trek's investment will be worth more than Saul's. B) One year ago, Saul's investment was worth less than Trek's investment. C) Trek earns a higher rate of return than...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT