Thinking Mathematically (6th Edition)

Published by Pearson
ISBN 10: 0321867327
ISBN 13: 978-0-32186-732-2

Chapter 8 - Personal Finance - 8.3 Simple Interest - Exercise Set 8.3: 16

Answer

$6\% = r$

Work Step by Step

RECALL: The formula for the future value $A$ is: $A=P(1+rt)$ where P= principal amount borrowed r = interest rate per year t = time in years Use the formula above, with $A=\$3180$, $P=\$3000$, and $t=1$, to obtain: $\$3180 = \$3000(1+r \cdot 1) \\\$3180 = \$3000(1+r)$ Divide $\$3000$ on both sides of the equation to obtain: $\frac{3180}{3000} = 1+r \\1.06 = 1+r$ Subtract $1$ on both sides of the equation to obtain: $0.06 = r$ Convert to percent to obtain: $6\% = r$
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