Jimmy invests 15,000 coins in a bank and
earns simple interest. After 2 years he
withdraws all his money from the bank
.If the amount that he receives is 17,000 coins ,calculate.
(a)the interest received
(b)the rate at which bank pays interest.
2,000 coins in interest
I = PRT
2,000 = 15,000 * R * 2
2,000 = 30,000R
2,000/30,000 = R
0.067 = 6.7% = R
To calculate the interest received and the rate at which the bank pays interest, we need to use the formula for simple interest:
Simple Interest = Principal * Rate * Time
Given:
Principal = 15,000 coins
Amount received after 2 years = 17,000 coins
We can calculate the interest received first.
Step 1: Calculate the interest
Interest = Amount received - Principal
Interest = 17,000 coins - 15,000 coins
Interest = 2,000 coins
So, the interest received is 2,000 coins.
Step 2: Calculate the rate at which the bank pays interest
To find the rate, we need to rearrange the formula for simple interest:
Rate = Interest / (Principal * Time)
In this case, the principal is 15,000 coins, time is 2 years, and the interest is 2,000 coins.
Rate = 2,000 coins / (15,000 coins * 2 years)
Rate = 2,000 coins / 30,000 coins
Rate = 1/15 or 0.0667 (rounded to 4 decimal places)
So, the rate at which the bank pays interest is approximately 0.0667 or 6.67%.