SOLUTION: Wilson invests $4000 at 6% p.a. with interest compounding monthly for 4 months. a)what is the monthly interest rate? b) find the amount of interest earned by calculating the simp

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Question 923615: Wilson invests $4000 at 6% p.a. with interest compounding monthly for 4 months.
a)what is the monthly interest rate?
b) find the amount of interest earned by calculating the simple interest for 4 months. DO NOT ROUND except for the final balance, which should be rounded to 2 decimal places.
can someone help e solve this question?:(
Found 2 solutions by rfer, Theo:
Answer by rfer(16322) About Me  (Show Source):
You can put this solution on YOUR website!
a) 0.06/12=0.005=.5%
b) I=Prt
I=4000*0.06*2/3
I=$160

Answer by Theo(13342) About Me  (Show Source):
You can put this solution on YOUR website!
the per month interest rate is equal to 6% divided by 12 divided by 100 = .005

4 months of simple interest = 4 * .005 * 4000 = 80 dollars.

the compound interest earned is equal to 80.6020025 dollars.

the simple interest can be calcullated in a couple of ways as shown below.

.06 * 4000 * 4/12 = 80

.005 * 4000 * 4 = 80

the compound interest is calculated as shown below:

4000 * (1.005)^4 - 4000 = 80.6020025