Note: Enter your answer and show all the steps that you use to solve this problem in the space provided.
Yvonne put $4,000 in a savings account. At the end of 3 years, the account had earned $960 in simple interest.
How much does she have in her account at the end of 3 years?
At what annual simple interest rate did the account grow? Show your work.
How many more dollars would she have in her account if the interest rate were 1% greater? Show your work.
the balance is the principal plus the interest, right?
I=Prt, so 4000*r*3 = 960
if r=r+0.01, then she'd have 4000*0.01 = $40 more
To find out how much Yvonne has in her account at the end of 3 years, we need to add the initial amount of money she put in ($4,000) to the amount earned in interest ($960).
So, Yvonne has $4,000 + $960 = $<<4000+960=4960>>4,960 in her account at the end of 3 years.
To find the annual simple interest rate, we can use the formula:
Interest = Principal (initial amount of money) * Rate (annual interest rate) * Time
In this case, we know the principal is $4,000, the interest is $960, and the time is 3 years. We need to rearrange the formula to solve for the rate:
Rate = Interest / (Principal * Time)
Rate = $960 / ($4,000 * 3)
Rate = $960 / $12,000
Rate = 0.08
Yvonne's account grew at an annual simple interest rate of 0.08, which is equivalent to 8%.
To calculate how many more dollars she would have in her account if the interest rate were 1% greater, we can use the new interest rate and the same principal and time:
New Interest Rate = 8% + 1% = 9%
New Interest = Principal * New Rate * Time
New Interest = $4,000 * 0.09 * 3
New Interest = $1,080
The difference in interest between the new rate and the original rate is:
Difference = New Interest - Original Interest
Difference = $1,080 - $960
Difference = $120
So, Yvonne would have $120 more in her account if the interest rate were 1% greater.