Question 693853: Charlie earns $4,900 in simple interest on a sum of
money invested for 5 years at a 7% interest rate. How
much simple interest would he have earned if he had invested
the same sum of money for 6 years at a 6% interest rate?
A. $3,600
B. $4,900
C.$5,040
D. $5,880
*I multiplied the 6% rate times the 6 years and then multiplied the money, then add the interest with the 4900, and got $6,664. Where did I go wrong?
Found 2 solutions by stanbon, KMST:
Answer by stanbon(75887)   (Show Source):
You can put this solution on YOUR website! Charlie earns $4,900 in simple interest on a sum of
money invested for 5 years at a 7% interest rate.
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Find the sum invested:
I = P*r*t
4900 = P*0.07*5
P = $14000
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How much simple interest would he have earned if he had invested
the same sum of money for 6 years at a 6% interest rate?
-------
Find "I":
I = P*r*t
I = 14000*6*0.06
Interest = $5040
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Cheers,
Stan H.
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A. $3,600
B. $4,900
C.$5,040
D. $5,880
Answer by KMST(5328)  (Show Source):
You can put this solution on YOUR website! You probably misread the problem. What the problem asks is how much Charlie would have earned if He had invested in a different way. Charlie chose to invest a certain (unknown to us) sum of money he originally had for 5 years at a 7% interest rate. He earned $4,900 from that. What the problem asks is how much Charlie would have earned if he instead had invested that same unknown sum of money for 6 years at a 6% interest rate.
You could find the sum of money Charlie had originally invested to get the $4,900 in interest.
Then, you could figure out how much interest he could get from that if he had invested it differently.
$ = amount Charlie had invested originally
$ = interets earned by investing $ for 5 years at 7%
We know that 
-->  -->  --> 
Investing that amount at 6% for 6 years, Charlie would have earned
YOUR MISTAKE:
By multiplying the 6% rate times the 6 years times $4,900,
you were multiplying the 6% rate times the 6 years times the $4,900 interest Charlie had already earned. That would give you what Charlie could earn in the next 6 years by investing just the $4,900 interest he had already earned at a 6% interest rate. You added that to the $4,900 Charlie had already earned to find what Charlie could get in 13 years if he reinvests only the interest after the first 5 years.
FUN:
Unfortunately for Charlie, interests rates are very low nowadays.
However, if Charlie could reinvest his original $14,000 plus the $4,900 interest for one more year at 0.75% he could make another $141.75, which added to the prior $4,900 earning would bring his total earnings up to $5041.75 earned over the course 6 years.
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