For her college fund jenny's parents invested $5000 four years ago. the account has now reached $6312. what is the approximate annual return rate (r) on this investment.

Question

Lilibeth

Mathematics

15 September, 13:15

For her college fund jenny's parents invested $5000 four years ago. the account has now reached $6312. what is the approximate annual return rate (r) on this investment.

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Answers (1)

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Serena Gibson · Answer 1

Rate = 6.56%

Step-by-step explanation:

Principal (P) = $5000

Interest (I) = $6312

Time (T) = 4 years

Rate (r) = ?

This question is involves simple interest and with the formula, we can easily plug in the values to find the rate.

S. I = P (1 + rt)

S. I = simple interest

P = principal

R = Rate

T = Time

6312 = 5000 (1 + r*4)

6312 = 5000 + 5000*4r

6312 - 5000 = 20000r

1312 = 20000r

r = 1312 / 20000

r = 0.0656

Rate are calculated in percentage hence we'll multiply it by 100

R = 6.56%