Question

A bank says you can double your money in 10 years if you put $1,000 in a simple interest account. What annual interest rate does the bank pay?

Answer 1

Not a friggin lot

Answer 2

HOW MUCH IS THE SIMPLE INTEREST?

Answer 3

?

Answer 4

Sorry for the caps , But does it say anything about the percentage ?

Answer 5

wut

Answer 6

the % for the simple interest?

Answer 7

do u know it

Answer 8

I'm saying does the question say anything with a percent

Answer 9

yes

Answer 10

Ok tell me

Answer 11

thats wwhat i want to know

Answer 12

I was trying to find the formula but I really cant find it try clicking on members online and @ their username and they should be sure to help you with this

Answer 13

A bank says you can double your money in 10 years if you put $1,000 in a simple interest account. What annual interest rate does the bank pay?

Sounds like annual compounding to me (not simple interest). If the Principal is P, the interest rate r, the time (in years) t, then the Amount, A, is A=p(1+r)^t.

So, since this fortunate investor ends up with twice as much money after 10 years, A=2P=P(1+r)^10.\[A=2P=P(1+r)^t\]

Answer 14

No, it's a simple interest problem, with an interesting solution.

\[I = Prt\]To double your money, \(I = P\), giving us\[P = Prt\]\[t = 10\]\[r =\]

Answer 15

If \[2P=P(1+r)^{10},then. 2=(1+r)^{10}\]

Answer 16

It graphically illustrates the power of compound interest vs. simple interest: the doubling time for compound interest at 7% is about 10 years. Look at how much more interest (higher rate) has to be paid to double your money in 10 years with simple interest!

Answer 17

and the problem boils down to solving this equation for r.

How? Take the logarithm (log or ln) of both sides.
Try this.
Ask if you need further guidance in solving for r.

Answer 18

here are the options
A1%
B 1.25%
C 10%
D 12.5%

Answer 19

Yeah, those answers are proof that the problem is looking for simple interest, as the 7% or so that would be the answer for compound interest doesn't appear, whereas the answer for simple interest does.

Answer 20

(Face red) I overlooked the phrase, "simple interest," in the problem statement. Therefore, kudos to @whpalmer!

Answer 21

I already answered this question for someone else last night, so I've had practice reading it :-)

Answer 22

:-)

Answer 23

wuts the answer

Answer 24

We'd be happy to guide you towards finding the answer yourself. What do you need to know to be able to do that?

Answer 25

dont know how

Answer 26

You start with $1000. You double your money. How much interest did you earn?

Answer 27

10%
??

Answer 28

Hint: Your money doubles due to the addition of the interest earned. How much interest was earned, if the Amount in your bank account started at $1000, but is now $2000?

Answer 29

12.5% ??

Answer 30

@kjjk @mathmale is asking you for the amount (in dollars) of interest earned, not the rate...

Answer 31

the question is asking for the rate

Answer 32

I understand that, but we're trying to walk you through the entire process. You did ask for help, why not allow us to share our experience and knowledge?

Answer 33

True, but there are several intermediate steps along the way towards finding the rate.

Answer 34

im comfused

Answer 35

You started with $1000; you ended up with $2000 after 10 years. How much interest did your money earn?

Answer 36

1 sec

Answer 37

Note: in this question I meant "an amount of money," not "interest rate." We'll calculate the interest rate shortly. But not yet.

Answer 38

intrest rate is 50?

Answer 39

Hint: Amount = Principal + Interest earned
Here: $2000 = $1000 + ( ?? )

Answer 40

1000

Answer 41

Great. Thanks for your persistence.

Then, as whpalmer4 has pointed out, i-Prt. Simple interest is equal to the product of the Principal, the interest rate and the time (in years).

Since you have correctly identified the interest earned as being $1000,

$1000 = P*r*t = $1000*r*10. Can you solve for r?

Answer 42

\[1000=1000*r*10\]

Answer 43

is the rate 12.5

Answer 44

Please, would you show me the work you've done towards calculating the interest rate?

Answer 45

\[1000=1000*r*10\] Please divide both sides of this equation by 1000 and write out your result.

Answer 46

confused

Answer 47

\[\frac{ 1000 }{1000 }=\frac{ 1000*r*10 }{ 1000 }\]

Answer 48

this shows how I would divide both sides of the equation by 1000. Please simplify this result.

Answer 49

so r=10

Answer 50

No.

Answer 51

1000/1000 on the left side results in 1 on the left side.

1000*r*10 on the right side, divided by 1000, results in 10*r on the right side.

The equation now looks like

1 = 10*r

Answer 52

1%=r

Answer 53

Please solve this for r.

Answer 54

If\[1=10r\]and we divide both sides by 10, we get\[\frac{ 1 }{ 10 }=r\]

Answer 55

Please convert this to a decimal fraction.

Answer 56

so it is 10%=r

Answer 57

I'd prefer that you answer, "0.10," and only after that do you convert this decimal fraction to a percentage.

0.10*100% =?

Answer 58

0.10*100% = 10

Answer 59

Wouldn't that be 10%?

Answer 60

yes

Answer 61

thanks makes senece now

Answer 62

Congrats, @kjjk, you have solved this problem. The simple interest rate is 10%. It's very, very important that you know how to work with that equation for simple interest, i=Prt. This is why I would not answer "yes" or "no" when y ou asked whether the interest rate was 12.5%.

Answer 63

thanks have to go

Answer 64

Good luck! Hope to work with you again.

Answer 65

bye