Answer to Question #194148 in Financial Math for Zethembiso

Question

An amount of R3 450 earns simple interest and accumulates to R5623, 50 after seven years. Had the yearly interest rate been 2% more, how much interest would he have accumulated in seven years

Answer 1

$5623.50 -3450 = 3450 \times r_1 \times 7 \\ 2173.5 = 24150 \times r_1 \\ r_1 = \frac{2173.5}{24150} = 0.09 = 9 \; \% \\ r_2 = r_1 + 2 = 11 \; \% = 0.11 \\ X-3450 = 3450 \times 0.11 \times 7 \\ X-3450 = 2656.5 \\ X = 6106.5 \\ Interest = 6106.5 -3450 = 2656.5$