The ABC Building Society opened an account with a balance of 215 at the beginning of the year and closed it at the end of the year with a balance of 320. Calculate the simple interest rate
To calculate the simple interest rate, we need to know the time period for which the money was deposited. Assuming it was for one year:
Simple Interest = Final Balance - Initial Balance
= 320 - 215
= 105
Simple Interest Rate = (Simple Interest/Initial Balance) x 100
= (105/215) x 100
= 48.8%
Therefore, the simple interest rate for this account is 48.8%.
Suppose you borrow 30000 from the bank for 6 semesters at an interest rate of 12,51 compounded yearly. What is the total amount that you should repay
To calculate the total amount that needs to be repaid, we can use the formula for compound interest:
A = P(1 + r/n)^(nt)
where:
A = the total amount
P = the principal amount borrowed (30000 in this case)
r = the annual interest rate (12.51% or 0.1251 as a decimal)
n = the number of times the interest is compounded per year (since it is compounded yearly, n=1)
t = the time in years (6 semesters = 3 years)
Substituting these values into the formula, we get:
A = 30000(1 + 0.1251/1)^(1*3*2)
A = 30000(1.1251)^6
A = 30000(2.01115)
A = 60334.50
Therefore, the total amount that needs to be repaid is 60,334.50.
Suppose that an investment of 9000 earns interest at a rate of 12,81% compounded per year. How much interest will be the investment earn after 3 years?
To calculate the interest that the investment will earn after 3 years, we can use the formula for compound interest:
A = P(1 + r/n)^(nt) - P
where:
A = the accumulated amount after 3 years
P = the principal investment (9000 in this case)
r = the annual interest rate (12.81% or 0.1281 as a decimal)
n = the number of times the interest is compounded per year (since it is compounded annually, n=1)
t = the time in years (3 in this case)
Substituting these values into the formula, we get:
A = 9000(1 + 0.1281/1)^(1*3) - 9000
A = 9000(1.1281)^3 - 9000
A = 9000(1.4177) - 9000
A = 3870.93
Therefore, the investment will earn an interest of approximately 3870.93 after 3 years.
To calculate the simple interest rate, you need two pieces of information: the starting balance (215) and the ending balance (320).
The simple interest formula is:
Simple Interest = Principal × Rate × Time
In this case, the principal is the starting balance, and the time is 1 year. So, the formula can be simplified to:
Simple Interest = Principal × Rate
To find the rate, divide the simple interest by the principal:
Rate = (Simple Interest / Principal) × 100%
Substituting the given values, we have:
Rate = ((320 - 215) / 215) × 100%
Rate = (105 / 215) × 100%
Now, let's calculate the interest rate:
Rate = (105 / 215) × 100%
Rate ≈ 48.84%
Therefore, the simple interest rate for the ABC Building Society account is approximately 48.84%.