SOLUTION: Juan wants to invest $2600 in a savings account. Determine the interest rate (simple interest) required for Juan 's investment to double in value in 14 years. Round your answer to
Question 1195415: Juan wants to invest $2600 in a savings account. Determine the interest rate (simple interest) required for Juan 's investment to double in value in 14 years. Round your answer to the nearest tenth of a percent. Found 3 solutions by jhunjiro, ikleyn, MathTherapy:Answer by jhunjiro(67) (Show Source): You can put this solution on YOUR website! A = P (1 + rt)
A = final amount
P = initial principal balance
r = annual interest rate
t = time (in years)
Given:
A = $5200
P = $2600
r = ?
t = 14 years
5200 = 2600 ( 1 + r(14)) divide both sides by 2600
2 = 1 + 14r subtract 1 both sides
1 = 14r divide both sides by 14
1/14 = r
r = 0.07142857142857142857142857142857 multiply by 100 for percent
r = 7.142857142857142857142857142857
rounded to the nearest tenth of a percent
r = 7.1 %
Use the formula for Future Value of an amount that earns simple interest, which is:
We then have: 2 = 1 + 14R ---- Substituting 2 for , since the invested amount will double, and 14 for T (time, in years).
Annual interest rate, or