document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=625357>Question 625357</A>: <I><SPAN STYLE=\"word-break: break-all;\"> If 20 years ago I put $5000 into an account that earned simple annual interest and in that account today I now have $12,000 what was my annual interest rate? </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #393470 by </B><A HREF=/tutors/aboutme.mpl?userid=reynard2007><B>reynard2007(52)</B></A><img src=\"/images/stars/stars-08.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=reynard2007><IMG SRC=http://www.algebra.com/images/aboutme-small.gif BORDER=0 alt=\"About Me\" VALIGN=MIDDLE></A>&nbsp;<IMG SRC=http://www.algebra.com/cgi-bin/show-face.mpl?user=reynard2007><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=393470\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> <font face=\"Calibri\" size=4><BR>\n" );
document.write( "Simple interest is calculated  on  the original amount only whereas compound interest is calculated on the original plus the interest for the previous year/s. <BR>\n" );
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document.write( "Knowing that, we only get the difference between the initial/principal and the final value. That is $7,000. You were able to earn that in 20 years, so each year you gain 7000 / 20 = <i>$350</i>. <BR>\n" );
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document.write( "Rate = Interest / Principal ===> 350 / 5000 = <B>7%</B><BR>\n" );
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document.write( "You earned 7% each year on the account.\r<BR>\n" );
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