SOLUTION: aN INVESTMENT OF $1200 EARNS $96 EACH YEAR. At the same rate, how much additional money must be invested to earn $128 each year?

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Question 164236: aN INVESTMENT OF $1200 EARNS $96 EACH YEAR. At the same rate, how much additional money must be invested to earn $128 each year?
Answer by aka042(26) About Me  (Show Source):
You can put this solution on YOUR website!
We first must find the implied interest rate of a $1200 investment earning $96 each year. This can be found as 1200%2Ar+=+96 => r+=+96%2F1200+=+.08. Therefore we are investing the $1200 at a 8% interest rate.


Now we must use our newly found r to solve for a new investment balance. We do this as follows: p%2A.08+=+128 => p+=+128%2F.08+=+1600. Therefore, we would need to invest $1600 to earn $128 each year.