SOLUTION: $16000 is invested for 5 years at 8% compounded annually. A. Find the total interest earned over 5 years to the nearest cent. B. find the simple interest rate that should deliv

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Question 814586: $16000 is invested for 5 years at 8% compounded annually.
A. Find the total interest earned over 5 years to the nearest cent.
B. find the simple interest rate that should deliver the same overall interest at the end of the 5 years.
??
Answer by ewatrrr(24785) About Me  (Show Source):
You can put this solution on YOUR website!
 

Hi,



$16000 is invested for 5 years at 8% compounded annually.  

In General A+=+P%281%2Br%2Fn%29%5E%28nt%29

A = Accumulated Amount

P= principal = 16000

r= annual rate = .08

n= periods per year = 1  (annually)

t= years =  5

A+=+16000%281.08%29%5E%285%29 = $23,509.25  0r  I = $7509.25

find the simple interest rate that should deliver 

the same overall interest at the end of the 5 years. 

 I = Prt 0r  r = I/Pt =  $7509.25/5*16,000 = r