Mrs jasmine Invested $4000 in a building society which paid simple interest at a rate of 7.25% per annum to its investors. After 2 years, the rate was increased to 7.6% per annum. Find the amount she had T the end of 7 years
Think of it as 7.25% for the whole 7 years, plus an additional 0.35% for the last 5 years
amount = 4000 + 4000(.0725)(7) + 4000(.0035)(5)
To find the amount Mrs. Jasmine had at the end of 7 years, we need to calculate the interest earned for each period and add it to the initial investment.
Step 1: Calculate the interest earned for the first 2 years.
Interest = Principal × Rate × Time
Interest = 4000 × 7.25% × 2
Interest = $580
Step 2: Add the interest earned for the first 2 years to the initial investment.
Amount after 2 years = Principal + Interest
Amount after 2 years = $4000 + $580
Amount after 2 years = $4580
Step 3: Calculate the interest earned for the next 5 years at the new interest rate of 7.6% per annum.
Interest = Principal × Rate × Time
Interest = $4580 × 7.6% × 5
Interest = $1746.80
Step 4: Add the interest earned for the next 5 years to the amount after 2 years.
Amount after 7 years = Amount after 2 years + Interest
Amount after 7 years = $4580 + $1746.80
Amount after 7 years = $6326.80
Therefore, Mrs. Jasmine had $6326.80 at the end of 7 years.
To find the amount Mrs. Jasmine had at the end of 7 years, we need to calculate the interest earned on her initial investment of $4000 at the different interest rates over the specified time periods.
First, let's calculate the interest earned for the first 2 years. The formula for simple interest is:
Interest = Principal * Rate * Time
For the first 2 years, the interest earned would be:
Interest1 = $4000 * 0.0725 * 2 = $580
Now, we need to calculate the principal for the next 5 years. The principal would be the initial investment plus the interest earned in the first 2 years.
Principal2 = $4000 + $580 = $4580
Now, let's calculate the interest earned for the next 5 years at the new interest rate of 7.6% per annum.
Interest2 = $4580 * 0.076 * 5 = $1746
Finally, to find the amount Mrs. Jasmine had at the end of 7 years, we add the principal and the total interest earned:
Amount = Principal2 + Interest2 = $4580 + $1746 = $6326
Therefore, Mrs. Jasmine had $6326 at the end of 7 years.