document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=1204321>Question 1204321</A>: <I><SPAN STYLE=\"word-break: break-all;\"> Juan wants to invest $3800 in a savings account. Determine the interest rate (simple interest) required for Juan 's investment to double in value in 20 years. Round your answer to the nearest tenth of a percent.<BR>\n" );
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document.write( "If Juan wishes to double his investment, then he must earn the deposit amount in interest.<BR>\n" );
document.write( "He must earn $3800 when depositing $3800 to get a doubled amount 2*3800 = 7600 dollars.\r<BR>\n" );
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document.write( "i = p*r*t<BR>\n" );
document.write( "3800 = 3800*r*20<BR>\n" );
document.write( "r = 1/20<BR>\n" );
document.write( "r = 0.05<BR>\n" );
document.write( "The simple interest rate must be 5%\r<BR>\n" );
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document.write( "Or we could have these steps<BR>\n" );
document.write( "A = P*(1+r*t)<BR>\n" );
document.write( "2*P = P*(1+r*t)<BR>\n" );
document.write( "2 = 1+r*t<BR>\n" );
document.write( "2 = 1+r*20<BR>\n" );
document.write( "2-1 = 20r<BR>\n" );
document.write( "1 = 20r<BR>\n" );
document.write( "r = 1/20<BR>\n" );
document.write( "r = 0.05<BR>\n" );
document.write( "These steps show that the deposit amount doesn't matter. To have a doubling time of 20 years, the simple interest rate must be 5%\r<BR>\n" );
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document.write( "Answer: 5%<BR>\n" );
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