Exercise 1

How long does it take a principal of 25,000 dollars at a simple interest rate of 5 \% to become 30,000 dollars?

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Exercise 2

45,000 dollars is deposited into a savings account. After one year, 4 months, and 20 days it totals 52,500 dollars. Calculate the simple interest rate for this account.

Exercise 3

Determine the simple interest rate applied to a principal over 20 years if the total interest paid equals the borrowed principal.

Exercise 4

How long does it take a principal payment to triple at a simple interest rate of 6 \%?

Exercise 5

Find the total amount of simple interest that is paid over a period of five years on a principal of 30,000 dollars at a simple interest rate of 6 \%.

Exercise 6

Calculate the total worth of an investment after six months with a principal of 10,000 dollars at a simple interest rate of 3.5 \%.

 

Solution of exercise 1

How long does it take a principal of 25,000 dollars at a simple interest rate of 5 \% to become 30,000 dollars?

30,000 - 25,000 = 5,000

t = \frac { 100 \times 5,000 }{ 25,000 \times 5 } = 4 years

 

Solution of exercise 2

45,000 dollars is deposited into a savings account. After one year, 4 months, and 20 days it totals 52,500 dollars. Calculate the simple interest rate for this account.

360 + 120 + 20 = 500 days

I = 52 500 − 45 000 = 7,500 dollars

I = \frac { P \times r \times t }{ 36,000 } \qquad r = \frac { 36,000 \times I }{ P \times t }

r = \frac { 36,000 \times 7500 }{ 45,000 \times 500 } = 12 \%

 

Solution of exercise 3

Determine the simple interest rate applied to a principal over 20 years if the total interest paid equals the borrowed principal.

I = P

I = \frac { P \times r \times t }{ 100 } \qquad r = \frac { 100 \times P }{ P \times t } \qquad r = \frac { 100 }{ t }

r = \frac { 100 }{ 20 } = 5 \%

 

Solution of exercise 4

How long does it take a principal payment to triple at a simple interest rate of 6 \%?

Let's say principal = 100

Three times of 100 \times 3 = 300

Interest = 300 - 100 = 200

Interest = \frac { P \times R \times t }{ 100 }

Interest = \frac { 100 \times 6 \times t }{ 100 } = 6t

6t = 200

t = \frac { 100 }{ 3 } = 33.33 years

 

Solution of exercise 5

Find the total amount of simple interest that is paid over a period of five years on a principal of 30,000 dollars at a simple interest rate of 6 \%.

I = \frac { 30,000 \times 5 \times 6 }{ 100 } = 9,000 dollars

 

Solution of exercise 6

Calculate the total worth of an investment after six months with a principal of 10,000 dollars at a simple interest rate of 3.5 \%.

I = \frac { 10,000 \times 3.5 \times 6 }{ 1,200 } = 175 dollars

10,000 + 175 = 10,175 dollars

 

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Emma

I am passionate about travelling and currently live and work in Paris. I like to spend my time reading, gardening, running, learning languages and exploring new places.