Question 2 Chen has received a gift of $2000 from a generous aunt. However, this is not enough to pay cash for the bicycle. To pay the cash price he needs a further $400 and he hopes to obtain this amount by investing the $2000 gift in two different ways; simple interest and compound interest. a Suppose Chen is able to invest his $2000 at a flat rate of 4% p.a. i Write down the simple interest formula and change the formula so that the time period T is the subject. ii Hence find the investment time required so that he earns interest to the value of at least $400. Give your answer as a whole number of months. b Suppose Chen is able to invest his $2000 at a rate of 8% p.a., compounded quarterly. Interest is added to his account at the end of each quarter. He hopes to earn interest of $400. Determine the values of A, P and R for this situation. ii Under these different conditions, find the investment time required so that he earns interest to the value of at least $400. Give your answer as a whole number of quarters.

Question 2 Chen has received a gift of $2000 from a generous aunt. However, this is not enough to pay cash for the bicycle. To pay the cash price he needs a further $400 and he hopes to obtain this amount by investing the $2000 gift in two different ways; simple interest and compound interest. a Suppose Chen is able to invest his $2000 at a flat rate of 4% p.a. i Write down the simple interest formula and change the formula so that the time period T is the subject. ii Hence find the investment time required so that he earns interest to the value of at least $400. Give your answer as a whole number of months. b Suppose Chen is able to invest his $2000 at a rate of 8% p.a., compounded quarterly. Interest is added to his account at the end of each quarter. He hopes to earn interest of $400. Determine the values of A, P and R for this situation. ii Under these different conditions, find the investment time required so that he earns interest to the value of at least $400. Give your answer as a whole number of quarters.

College Algebra

1st Edition

ISBN:9781938168383

Author:Jay Abramson

Publisher:Jay Abramson

Chapter9: Sequences, Probability And Counting Theory

Section9.4: Series And Their Notations

Problem 56SE: To get the best loan rates available, the Riches want to save enough money to place 20% down on a...

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