Question #117577

Without using finance calculator,

(a) What sum of money will become RM 15,000 in three years at a simple interest rate of 8% per annum?

(b) A certain sum of money is invested now. This investment will be worth RM5500 after fifteen months and RM5800 after twenty-four months. Find the original principal and the simple interest rate that was offered.

(a) What sum of money will become RM 15,000 in three years at a simple interest rate of 8% per annum?

(b) A certain sum of money is invested now. This investment will be worth RM5500 after fifteen months and RM5800 after twenty-four months. Find the original principal and the simple interest rate that was offered.

Expert's answer

a) If the investment is x after 3 years it will become:

"x*(1+0.08*3)=15000"

Which means that sum of money is

"x=\\frac{15000}{1.24}\\approx12096.77" RM

b) If the initial investment is x and interest rate is r, investment after fifteen and twenty four month will be equial to:

"x*(1+\\frac{15}{12}*r)=5500\\\\\\\\x*(1+\\frac{24}{12}*r)=5800"

Which means that original principal is RM 5 000, offered simple interest rate is 8%.

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