# Math

Deana invests some money that earns interest compounded annually. At the end of the first year, she earns \$400 in interest. At the end of the second year, she earns \$432 in interest.
a) what interest rate, compounded annually, is deana earning?
b) how much did she invest?

1. 👍
2. 👎
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1. I think you can do the following:

P*R=I

Where

P=principal=amount investere
R=interest rate
and
I=amount in interest

You have two equations.

1.)

P*R=400

and

(P+400)*R=432

****The principal now includes the interest from the previous year.

Solving for P (Equation 1):

P=400/R

Plug into equation 2, and solve for R:

(400/R+400)*R=432

400+400R=432

400R=32

R=32/400

R=0.008=0.8%

You know R, so solve for P:

Using equation 1:

P=400/R

P=400/0.008

P=\$50,000

1. 👍
2. 👎
2. Fixed a typo: Look for #%^

I think you can do the following:

P*R=I

Where

P=principal=amount invested (#\$^)
R=interest rate
and
I=amount in interest

You have two equations.

1.)

P*R=400

and

(P+400)*R=432

****The principal now includes the interest from the previous year.

Solving for P (Equation 1):

P=400/R

Plug into equation 2, and solve for R:

(400/R+400)*R=432

400+400R=432

400R=32

R=32/400

R=0.008=0.8%

You know R, so solve for P:

Using equation 1:

P=400/R

P=400/0.008

P=\$50,000

1. 👍
2. 👎

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