Question

How much money would you have to invest to make $300 within 2 years if the interest rate was 4.5%?

Answer 1

is it compound or simple interest?

Answer 2

simple interest

Answer 3

ok, then you have to first know the equation for simple interest, which is I = prt,
so I is interest, p ir principal amount invested, r is rate, and t is time,

so your equation is 300 = p * (4.5/100) * 2
p is the amount you need to invest to get the interest of 300.
and we have to divide the percentage by 100 to get a rate in decimal.
so, you simplify and ssubstitute to get:

300 = p * 0.09
p = 300/0.09
p = 3333.33$ so you got to invest 3333 dollars and 33 cents to get 300$ interest after 2 years at 4.5% simple interest

Answer 4

is it clear? do you understand it now?

Answer 5

where did you get the 0.09 from

Answer 6

oh nvm i no how

Answer 7

well, 300 = p * (4.5/100) * 2
so, if i divide 4.5 by 100 and multiply by 2, I get 0.09

Answer 8

so all you have to do is remember the formula for simple interest

Answer 9

so how would i write my equation

Answer 10

in all my practice stuff it looks like P = ..... not 300 = p

Answer 11

ok, the equation for simple interest goes like this:

simple interest = amount invested x rate x number of years

and dont forget that the rate is in decimal, so if the question gives you a percentage like 4.5% per year, you have to convert it to a decimal rate by dividing the percentage by 100.

Answer 12

so, after you write down the simple interest formula, you can replace the words with the numbers you are given, and then just solve for the variable you dont know

Answer 13

okay

Answer 14

get it?

Answer 15

if, yes, feel free to Become my fan LOL =D

Answer 16

sooo how do i write the equation

Answer 17

what do you mean??? I already gave you the formula, it can also be writen simply as i=prt

so to get the equation, simply replace the letters with numbers, thats it.

in your case, it will be like this:

\[300 = p * (4.5) * 2\]

Answer 18

the * is for multiplication =D

Answer 19

and you can then move the variables around, like this, to make p the subject:

\[p = 300/(4.5/100*2)\]

Answer 20

/ is for division

Answer 21

and the brackets ( ) simply tell you that you must do the calculations inside them first, before any other calculations

Answer 22

ok thank you...

Answer 23

Calculate the compounded amount on $2000 for 3 years at 5%, compounded annually.

Answer 24

wait, so is the 2000 dollars in the question the amount invested ?

Answer 25

i dont no, lol. thats exactly what the question says. i copy and pasted it

Answer 26

i guess so.

Answer 27

ok, well, this is VERY easy. but since it is compound interest you need to use a different formula, whic is \[A = P(1+R)^{n}\]

A is the compound interest PLUS the original amount invested
P is the original amount invested
R is the rate (dont forget to divide the percentage by 100 to get rate)
and n is the number of years


so,
in your case P is 2000, R is 5%/100=0.05
n is 3, and you do not know the A

Answer 28

ok

Answer 29

so, \[A = 2000(1+0.05)^{3}\]

which is \[A = 2000(1.05)^{3}\]

which is A = 2000 * 1.157625
and that results to A = 2315.25

so A is the total amount in bank right now, including both the interest and the original amount,

so to get the interest that you got only,
you need to subtract the original amount from A, which is 2315.25-2000=315.25

so the compound interest you get after investing a 2000 at 5% compound interest for 3 years is $2315.25

Answer 30

got it?

Answer 31

ok, you know both of the formulas now, and the methods how to solve this kind of problems, so just practise and experiment, and enjoy maths, because maths is EASY if you tell yourelf it is easy, just relax and enjoy it.
Good luck.
If you got any more questions post them as a new question.

Answer 32

wouldnt it be $315.25

Answer 33

this is what i did and what i got ....

1year 1 - $2000 x 0.05 x 1 = $100
2 year 1 - $2100 x 0.05 x 1 = $105
3 year 1 - $2205 x 0.05 x 1 = $110.25

100 + 105 + 110.25 = $315.25

Answer 34

that is what i said, I just mistakenly forgot to remove the 2 infront

Answer 35

and that results to A = 2315.25 so A is the total amount in bank right now, including both the interest and the original amount, so to get the interest that you got only, you need to subtract the original amount from A, which is 2315.25-2000=315.25

Answer 36

A is 2315.25, but this is not interest, it is interest + investment.
but interest only is 315.25

so yes you are right

Answer 37

ok thank youuu