Maggie has $14,100 to invest, and wishes to gain $4,000 in interest over the next eight years. Approximately what is the minimum simple interest rate Maggie needs to reach her goal?

Question

Giovanny Suarez

Mathematics

5 April, 08:25

Maggie has $14,100 to invest, and wishes to gain $4,000 in interest over the next eight years. Approximately what is the minimum simple interest rate Maggie needs to reach her goal?

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Answers (1)

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Isabela · Answer 1

Given:

Principal: 14,100

Interest:4,000

term: 8 years

rate:?

We'll use the simple interest rate formula to get the interest rate needed.

Simple Interest = Principal * Interest Rate * Term

4,000 = 14,100 * Interest rate * 8 years

4,000 = 112,800 * Interest rate

4,000 / 112,800 = Interest rate

0.03546 = Interest rate

0.03546 * 100% = 3.546% or 3.55% is the interest rate needed.

S. I = 14,100 * 0.0355 * 8

S. I = 500.55 * 8

S. I = 4,004.40