14.A principal of $5000 was invested in a savings account for 4 years. If the interest earned for the period was $400, what was the interest rate?
A) 1% B) 1.5% C) 2% D) 2.5%
2006-09-01 09:06:36 · 8 answers · asked by Julie B 2 in Education & Reference ➔ Homework Help
If assume it's simple interest, and not compounded, and also assume the period on the interest rate is 1 year, then all we have to do is divide the $400 into four pieces (one for each year), making $100/year.
So, what is $100 as a percentage of $5000? (100 ÷ 5000) = 0.02 = 2%.
Note that if you use a more realistic interest scheme, something that actually compounds, none of the answers is exactly right, but 2% is still closest.
Hope that helps!
2006-09-01 09:12:35 · answer #1 · answered by Jay H 5 · 0⤊ 0⤋
C 2%
2006-09-01 09:08:47 · answer #2 · answered by Mar 2 · 0⤊ 1⤋
2%
2006-09-01 09:09:07 · answer #3 · answered by god knows and sees else Yahoo 6 · 0⤊ 0⤋
c with simple interest
PV X (1 + i * t) = FV
PV = present value
i = int rate (assuming per year)
t = time (yrs in your case)
FV = future value
5000 x (1+i*4) = 5400
(1+i*4) = 5400/5000
(1+i*4) = 1.08
i*4 = 0.08
i = 0.02 or 2%
2006-09-01 11:52:59 · answer #4 · answered by Silver tongue 2 · 0⤊ 0⤋
The answer is c, 2%
2006-09-01 09:11:36 · answer #5 · answered by Mimi D 1 · 0⤊ 0⤋
None of the answers is exactly correct but 2% is the closest.
2006-09-01 10:09:16 · answer #6 · answered by skyway 2 · 0⤊ 0⤋
c)i think im onley in 8th grade
2006-09-01 09:08:24 · answer #7 · answered by Anonymous · 0⤊ 1⤋
C
2006-09-01 09:11:58 · answer #8 · answered by ninas 2 · 0⤊ 0⤋