1 If you want to earn 15 annual simple interest on an invest

1. If you want to earn 15% annual simple interest on an investment, how much should you pay for a note that will be worth $13500 in 10 months?

2.A student has a savings account earning 9% simple interest. She must pay $1600 for first-semester tuition by Septenber 1 and $1600 for second-semester tuition by January ~~~a. How much must she earn in the summer (by September 1) in order to pay the first-semester bill on time and still have the remainder of the summer earnings grow to $1600 between September 1 and January 1(Round answeer to the nearest cent)

Solution

Given that

A=13500,

T=10 months

=10/12 year

Let investment is P

given Interest=I=(15P)/100

we have

I= PTR/100 where R is rate of interest

so,

15P/100 = PTR/100

15P=PTR

15=TR

15=(10/12)(R)

R=18%

we have

A=P(1+(TR/100))

   13500=P(1+(10/12)(18)/100)

P=20(13500)/23

= 11739.13