/*! This file is auto-generated */ .wp-block-button__link{color:#fff;background-color:#32373c;border-radius:9999px;box-shadow:none;text-decoration:none;padding:calc(.667em + 2px) calc(1.333em + 2px);font-size:1.125em}.wp-block-file__button{background:#32373c;color:#fff;text-decoration:none} Problem 33 You borrow \(\$ 1400\) from a fr... [FREE SOLUTION] | 91影视

91影视

Log out

Learning Materials

Features

Discover

Chapter 8: Problem 33

You borrow \(\$ 1400\) from a friend and promise to pay back \(\$ 2000\) in two years. What simple interest rate, to the nearest tenth of a percent, will you pay?

Short Answer

Expert verified
The simple interest rate paid will be approximately 21.4% per annum.

Step by step solution

01

Identify the Knowns and Unknowns

In this problem, the principal amount, P, is the amount borrowed which is \$1400. The total repayment, which includes the borrowed amount plus interest, amounts to \$2000. This means, the interest, I, is \$2000 - \$1400 = \$600. The time, T, is 2 years. What we're trying to find out is the rate R.
02

Rearrange the Simple Interest Formula to Solve for Rate

The Simple Interest formula is \(I = PRT\). In this case, we are solving for the rate so we will rearrange the formula to \(R = I/(PT)\).
03

Substitute known values into the formula

Plug the values known into the formula. So, \(R = \$600/(\$1400 \times 2)\).
04

Solve for R

Solving for R yields \(R= 0.2143\).
05

Convert Decimal to Percentage

To convert the decimal to a percentage, we multiply by 100. So, the interest rate is \(21.43% \)

Unlock Step-by-Step Solutions & Ace Your Exams!

  • Full Textbook Solutions

    Get detailed explanations and key concepts

  • Unlimited Al creation

    Al flashcards, explanations, exams and more...

  • Ads-free access

    To over 500 millions flashcards

  • Money-back guarantee

    We refund you if you fail your exam.

Over 30 million students worldwide already upgrade their learning with 91影视!

One App. One Place for Learning.

All the tools & learning materials you need for study success - in one app.

Get started for free

Most popular questions from this chapter

In Exercises 11-14, use the formula $$ A=\frac{P\left[\left(1+\frac{r}{n}\right)^{n t}-1\right]}{\left(\frac{r}{n}\right)} $$ Round all computations to the nearest dollar. Suppose that you drive 40,000 miles per year and gas averages \(\$ 4\) per gallon. a. What will you save in annual fuel expenses by owning a hybrid car averaging 40 miles per gallon rather than an SUV averaging 16 miles per gallon? b. If you deposit your monthly fuel savings at the end of each month into an annuity that pays \(5.2 \%\) compounded monthly, how much will you have saved at the end of six years?

In Exercises 1-10, use $$ P M T=\frac{P\left(\frac{r}{n}\right)}{\left[1-\left(1+\frac{r}{n}\right)^{-n t}\right]} $$ Round answers to the nearest dollar. Suppose that you decide to borrow \(\$ 40,000\) for a new car. You can select one of the following loans, each requiring regular monthly payments: Installment Loan A: three-year loan at \(6.1 \%\) Installment Loan B: five-year loan at \(7.2 \%\). a. Find the monthly payments and the total interest for \(\operatorname{Loan} A\). b. Find the monthly payments and the total interest for Loan B. c. Compare the monthly payments and the total interest for the two loans.

a. Suppose that between the ages of 22 and 40 , you contribute \(\$ 3000\) per year to a \(401(\mathrm{k})\) and your employer contributes \(\$ 1500\) per year on your behalf. The interest rate is \(8.3 \%\) compounded annually. What is the value of the \(401(\mathrm{k})\), rounded to the nearest dollar, after 18 years? b. Suppose that after 18 years of working for this firm, you move on to a new job. However, you keep your accumulated retirement funds in the \(401(\mathrm{k})\). How much money, to the nearest dollar, will you have in the plan when you reach age 65 ? c. What is the difference between the amount of money you will have accumulated in the \(401(\mathrm{k})\) and the amount you contributed to the plan?

Describe two aspects of responsible credit card use.

In Exercises 1-10, a. Find the value of each annuity. Round to the nearest dollar b. Find the interest. $$ \begin{array}{|l|l|l|} \hline \begin{array}{l} \$ 150 \text { at the end of } \\ \text { every six months } \end{array} & \begin{array}{l} 6.5 \% \text { compounded } \\ \text { semiannually } \end{array} & 25 \text { years } \\ \hline \end{array} $$
See all solutions

Recommended explanations on Math Textbooks

Probability and Statistics

Read Explanation

Calculus

Read Explanation

Discrete Mathematics

Read Explanation

Applied Mathematics

Read Explanation

Mechanics Maths

Read Explanation

Geometry

Read Explanation
View all explanations

What do you think about this solution?

We value your feedback to improve our textbook solutions.

Study anywhere. Anytime. Across all devices.