For her college fund jenny’s parents invested $5000 four years ago. the account has now reached $6312. what is the approximate annual return

Question

For her college fund jenny’s parents invested $5000 four years ago. the account has now reached $6312. what is the approximate annual return rate (r) on this investment.​

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Emery 4 weeks 2021-09-13T23:06:31+00:00 1 Answer 0

Answers ( )

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    2021-09-13T23:07:39+00:00

    Answer:

    Rate = 6.56%

    Step-by-step explanation:

    Principal (P) = $5000

    Interest (I) = $6312

    Time (T) = 4 years

    Rate (r) = ?

    This question is involves simple interest and with the formula, we can easily plug in the values to find the rate.

    S.I = P(1 + rt)

    S.I = simple interest

    P = principal

    R = Rate

    T = Time

    6312 = 5000(1 + r*4)

    6312 = 5000 + 5000*4r

    6312 – 5000 = 20000r

    1312 = 20000r

    r = 1312 / 20000

    r = 0.0656

    Rate are calculated in percentage hence we’ll multiply it by 100

    R = 6.56%

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