SOLUTION: Charlie earns $4,900 in simple interest on a sum of money invested for 5 years at a 7% interest rate. How much simple interest would he have earned if he had invested the same

Question 693853: Charlie earns $4,900 in simple interest on a sum of
money invested for 5 years at a 7% interest rate. How
much simple interest would he have earned if he had invested
the same sum of money for 6 years at a 6% interest rate?

A. $3,600
B. $4,900
C.$5,040
D. $5,880

*I multiplied the 6% rate times the 6 years and then multiplied the money, then add the interest with the 4900, and got $6,664. Where did I go wrong?
Found 2 solutions by stanbon, KMST:
Answer by stanbon(75887) (Show Source): You can put this solution on YOUR website!
Charlie earns $4,900 in simple interest on a sum of
money invested for 5 years at a 7% interest rate.
------
Find the sum invested:
I = P*r*t
4900 = P*0.07*5
P = $14000
==================
How much simple interest would he have earned if he had invested
the same sum of money for 6 years at a 6% interest rate?
-------
Find "I":
I = P*r*t
I = 14000*6*0.06
Interest = $5040
=====================
Cheers,
Stan H.
=======================
A. $3,600
B. $4,900
C.$5,040
D. $5,880

Answer by KMST(5328) (Show Source): You can put this solution on YOUR website!
You probably misread the problem. What the problem asks is how much Charlie would have earned if He had invested in a different way. Charlie chose to invest a certain (unknown to us) sum of money he originally had for 5 years at a 7% interest rate. He earned $4,900 from that. What the problem asks is how much Charlie would have earned if he instead had invested that same unknown sum of money for 6 years at a 6% interest rate.

You could find the sum of money Charlie had originally invested to get the $4,900 in interest.
Then, you could figure out how much interest he could get from that if he had invested it differently.
$ = amount Charlie had invested originally
$ = interets earned by investing $ for 5 years at 7%
We know that
--> --> -->
Investing that amount at 6% for 6 years, Charlie would have earned

YOUR MISTAKE:
By multiplying the 6% rate times the 6 years times $4,900,
you were multiplying the 6% rate times the 6 years times the $4,900 interest Charlie had already earned. That would give you what Charlie could earn in the next 6 years by investing just the $4,900 interest he had already earned at a 6% interest rate. You added that to the $4,900 Charlie had already earned to find what Charlie could get in 13 years if he reinvests only the interest after the first 5 years.

FUN:
Unfortunately for Charlie, interests rates are very low nowadays.
However, if Charlie could reinvest his original $14,000 plus the $4,900 interest for one more year at 0.75% he could make another $141.75, which added to the prior $4,900 earning would bring his total earnings up to $5041.75 earned over the course 6 years.
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