Question

If you deposit today $9,719 in an account for 6 years and at the end accumulate $10,221, how much compound interest rate (rate of return) you earned on this investment?

You will deposit 18,057 at 10% simple interest rate for 6 years, and then move the amount you would receive to an investment account at 10 % compound rate for another 3 years. How much money would you have at the end of the entire period?

If you deposit today 11,445.85 in an account earning 8% compound interest, for how long should you invest the money in order to earn 12,488.36 (profiat)?

Muhammad takes out a loan of $ 2,683, at 8% simple interest, for 4 years. How much will he pay back at the end of year 4?

Calculate the amount of interest on an investment of AED 168,721 at 8% simple interest for 6 years.

Answer 1

1) Deposit amount = $9,179

Tenure = 6 years

Ending Payment = $10,221

Let say compound interest is "r"

10,221 = 9,179 * (1 + r)6

r = 1.80%

2) Amount Deposited = $18,057

Rate of Interest = 10% simple interest

Tenure = 6 years

Amount after 6 years = 18,057 + 18,057 * 0.1 * 6 = 28,891.2

This amount is deposited at 10% compound for another 3 years

It would be 28,891.1 * (1 + 0.1)3 = 38,454.18

3) Deposit amount = 11,445.85

Rate of Interest = 8% compound interest

Let say money deposit for X years.

To earn profit of 12,488.36, total ampunt you should get 11,445.85 + 12,488.36 = 23,934.21

23,934.21 = 11,445.85 * (1 + 0.08)n

2.09 = (1 + 0.08)n

n = 9.6 years

4) Loan = 2,683

rate of interest = 8% simple interest

Duration = 4 years

At the end of 4 years, payable amount is 2,683 + 2,683 * 0.08 * 4 = 3,541.56

5) Amount Invested = AED168,721

Rate of Interest = 8% simple interest

Duration = 6 years

Rate of Interest = 168,721 * 0.08 * 6 = 80,986.08