SOLUTION: Help! Joe Borowski invested $5700 in a mutual fund one year ago. During the year, his fund increased in value by $313.50. What interest rate has Joe's investment earned?

Algebra ->  Finance -> SOLUTION: Help! Joe Borowski invested $5700 in a mutual fund one year ago. During the year, his fund increased in value by $313.50. What interest rate has Joe's investment earned?      Log On


   

Question 883931: Help!
Joe Borowski invested $5700 in a mutual fund one year ago. During the year, his fund increased in value by $313.50. What interest rate has Joe's investment earned?
Found 2 solutions by josmiceli, jim_thompson5910:
Answer by josmiceli(19441) About Me  (Show Source):
You can put this solution on YOUR website!
I'm assuming that is is a simple
interest rate
----------------
The fraction of the increase divided
by the original investment is
+313.5+%2F+5700+
The % of the increase over the
original investment is:
+%28+313.5+%2F+5700+%29%2A100+
+.055%2A100+=+5.5+
Joe's investment earned 5.5%

Answer by jim_thompson5910(35256) About Me  (Show Source):
You can put this solution on YOUR website!
Assuming simple interest,


I = P*r*t

313.50 = 5700*r*1

313.50 = 5700*r

313.50/5700 = r

0.055 = r

r = 0.055


Which means the fund has an interest rate of 5.5% (simple interest)