Posted by **Monica** on Sunday, January 29, 2012 at 10:00pm.

If the principal P = $900, the interest I = $882, and time t = 7 years. What is the rate? What is the future value?

- Math -
**Reiny**, Sunday, January 29, 2012 at 10:07pm
I will assume "simple interest", even though for 7 yrs that is very unusual

Rate = Interest/(prinicipal x time)

= 882/(900(7))

=.14

or 14%

check: I = PRT = 900(.14)(7) = 882

if it is compound interest ....

1782 = 900(1+i)^7

1.98 = (1+i)^7

take 7th root

1.102525 = 1+i

i = .102525

the annual rate would be 10.25%

this shows the tremendous difference between simple and compound interest over a significant time

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