Question 167499This question is from textbook
: Suppose you invest $7,000 in a mutual fund that pays simple interest for one year. If you earn at most $920 at the end of 18 months, what is the maximum annual interest rate for this investment.
This question is from textbook
: Suppose you invest $7,000 in a mutual fund that pays simple interest for one year. If you earn at most $920 at the end of 18 months, what is the maximum annual interest rate for this investment.
Answer by stanbon(19738)  (Show Source):
You can put this solution on YOUR website!Suppose you invest $7,000 in a mutual fund that pays simple interest for one year. If you earn at most $920 at the end of 18 months, what is the maximum annual interest rate for this investment.
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I = Prt
920 >= 7000*r*(3/2)
3500*3r <= 920
r <= 920/(3*3500)
r <= 0.0876 = 8.76%
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Cheers,
Stan H.
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