SOLUTION: Jim invests some money for five years in an account at 4% simple interest per annum. what is the percentage increase of investment at the end of five years?

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Question 1138488: Jim invests some money for five years in an account at 4% simple interest per annum.
what is the percentage increase of investment at the end of five years?
Found 2 solutions by Boreal, ikleyn:
Answer by Boreal(15235) About Me  (Show Source):
You can put this solution on YOUR website!
I=PRT=P*0.04*5=P*0.20
That is a 20% increase.

Answer by ikleyn(52748) About Me  (Show Source):
You can put this solution on YOUR website!
.
The amount at the account at the end of 5 years will be  P*(1+0.04*5) = 1.2P,

where P is the principal.


The percentage of increase in 5 years is  %28%281.2P-P%29%2FP%29%2A100 = 20%.

Tutor @Boreal mistakenly used the formula for a compound account, while the problem talks about a simple interest account.



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Comment from student : When I try to do it that way, I do not get 1.2p I get 1.000000102 Is p just 1? How did you get 1.2?
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My response : Try again.