document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=844305>Question 844305</A>: <I><SPAN STYLE=\"word-break: break-all;\"> I am having trouble setting up these problems, I do not know which formula to use r=I/pt or I=Prt\r<BR>\n" );
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document.write( "An investor earned $1080 on an investment of $60,000 in 45 days. Find the annual simple interest rate earned on the investment.\r<BR>\n" );
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document.write( "Capitol City Bank approves a home-improvement loan application for $17,000 at an annual simple interest rate of 9.75% for 270 days. What is the maturity value of the loan?<BR>\n" );
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document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #508673 by </B><A HREF=/tutors/aboutme.mpl?userid=Theo><B>Theo(13342)</B></A><img src=\"/images/stars/stars-13.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=Theo><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=Theo><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=508673\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> I'm assuming a year is equal to 365 days.<BR>\n" );
document.write( "If the number of days per year you are using is different than this, you will need to re-calculate using your number of days per year instead.\r<BR>\n" );
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document.write( "I'm assuming T will be measured in years, so 45 days is equal to 45 / 365 years.\r<BR>\n" );
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document.write( "Likewise 270 days will be equal to 270 / 365 years.\r<BR>\n" );
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document.write( "An investor earned $1080 on an investment of $60,000 in 45 days. Find the annual simple interest rate earned on the investment.\r<BR>\n" );
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document.write( "use I = PRT.\r<BR>\n" );
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document.write( "I = 1080<BR>\n" );
document.write( "P = 60000<BR>\n" );
document.write( "R = interest rate per year you are looking for.<BR>\n" );
document.write( "T = 45 / 365 years\r<BR>\n" );
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document.write( "Formula becomes:\r<BR>\n" );
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document.write( "1080 = 60000 * R * 45/365\r<BR>\n" );
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document.write( "divide both sides of this equation by 60000 and multiply both sides of this equation by 365/45 to get:<BR>\n" );
document.write( "1080 / 60000 * 365/45 = R<BR>\n" );
document.write( "solve for R to get:<BR>\n" );
document.write( "R = .146 which is equal to 14.6% per year simple interest.\r<BR>\n" );
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document.write( "Capitol City Bank approves a home-improvement loan application for $17,000 at an annual simple interest rate of 9.75% for 270 days. What is the maturity value of the loan?\r<BR>\n" );
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document.write( "You are now looking for the maturity value of the loan which is the same as the future value of the loan.\r<BR>\n" );
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document.write( "The future value of the loan is the principal plus the interest, not just the interest.\r<BR>\n" );
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document.write( "the formula for simple interest is equal to I = PRT.<BR>\n" );
document.write( "the formula for future value of the loan is F = P + I, where P is the principal and I is the interest.<BR>\n" );
document.write( "since I = PRT, this formula can also be shown as F = P + PRT.<BR>\n" );
document.write( "you can also factor out the common P to get F = P * (1 + RT).\r<BR>\n" );
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document.write( "in this problem:<BR>\n" );
document.write( "P = 17000<BR>\n" );
document.write( "R = .0975 per year<BR>\n" );
document.write( "T = 270 / 365 years\r<BR>\n" );
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document.write( "the formula we'll use is F = P + PRT.<BR>\n" );
document.write( "this formula becomes:<BR>\n" );
document.write( "F = 17000 + 17000*.0975*270/365<BR>\n" );
document.write( "solve for F to get:<BR>\n" );
document.write( "F = 17000 + 1226.10 which results in:<BR>\n" );
document.write( "F = 18226.10\r<BR>\n" );
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document.write( "The maturity value of the loan is equal to $18,226.10.\r<BR>\n" );
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