T timothy New member Sep 24, 2009 #1 Suppose I wanted to deposit $8,000 into a bank account today, and the bank promises to pay me $10,000 five years from now. What is the annual rate of interest on this fixed bank deposit?
Suppose I wanted to deposit $8,000 into a bank account today, and the bank promises to pay me $10,000 five years from now. What is the annual rate of interest on this fixed bank deposit?
Y Yorky New member Sep 24, 2009 #2 5% a year simple interest. 8000x = 10,000 x = 10,000/8,000 = 1.25 25/5 = 5% or 10,000 - 8,000 = 2,000 .05 x 8000 = 400 x 5 = 2000
5% a year simple interest. 8000x = 10,000 x = 10,000/8,000 = 1.25 25/5 = 5% or 10,000 - 8,000 = 2,000 .05 x 8000 = 400 x 5 = 2000
