Jordan K. answered • 10/15/15

Tutor

4.9
(79)
Nationally Certified Math Teacher (grades 6 through 12)

Hi Dylan,

Let's begin by calculating the number of days elapsed from August 16, 2007 to November 22, 2008:

August 16, 2007 to November 22, 2008:

(31 - 16) + (30 + 31 + 22) = 15 + 83 = 98 days

November 22, 2007 to November 2008 = 366 days

August 16, 2007 to November 22, 2008:

98 + 366 = 464 days

Next, let's calculate the Interest (I) accrued:

I = maturity value minus investment amount

I = 15,820 - 14,199 = $1,621

Now we have everything we need to plug into the Simple Interest formula to calculate interest Rate (R):

I = PRT [Simple Interest formula]

I (Interest) = $1,621

P (Principal) = $14,199

R (Rate) = unknown

T (time in years) = 464/365

1,621 = (14,199)(R)(464/365)

(1,621)(365) = (14,199)(R)(464/365)(365)

591,665 = (14,199)(R)(464)

591,665 = 6,588,336R

R = 591,665/6,588,336

R = 0.08980492191

R = (0.08980492191) x 100

R = 8.980492191%

**R = 9.0% (rounded)**

Thanks for submitting this problem and glad to help.

God bless, Jordan.