Math Problem Statement
At what rate was an investment made that obtains ₱2520 on ₱10500 over four years
Solution
To determine the rate at which an investment grows, we use the formula for simple interest:
Where:
- is the final amount,
- is the principal (initial investment),
- is the rate of interest per year (in decimal form),
- is the time in years.
From the problem, we have:
- ,
- ,
- .
Now, substituting the known values into the formula:
Let's solve for :
Dividing both sides by 10500:
Subtracting 1 from both sides:
Finally, dividing both sides by 4:
Thus, the rate of interest is 6% per year.
Would you like more details or have any questions?
Here are some related questions to explore:
- What is the formula for compound interest?
- How would the result change if the interest were compounded annually?
- How does the principal amount affect the final amount?
- What would be the total amount after 6 years at the same rate?
- What if the interest was paid monthly instead of annually?
Tip: When dealing with interest calculations, ensure you're clear on whether it's simple or compound interest. This affects the outcome significantly!
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Math Problem Analysis
Mathematical Concepts
Simple Interest
Algebra
Rate Calculation
Formulas
A = P(1 + rt)
r = (A/P - 1)/t
Theorems
-
Suitable Grade Level
Grades 9-12
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