Respuesta :
Simple interest is a method of calculating interest on an amount for n period of time with a rate of interest of r. The rate of investment on $1000 is 7.5$ and on $12,000 is 8%.
What is simple interest?
Simple interest is a method of calculating interest on an amount for n period of time with a rate of interest of r. It is calculated with the help of the formula,
SI = PRT
where SI is the simple interest, P is the principal amount, R is the rate of interest, and T is the time period.
Let the rate of interest be represented by r. Given that the annual interest on a $12,000 investment exceeds the interest earned on a $1000 investment by 885. The $12,000 is invested at a 0.5% higher rate of interest than the $1000. Therefore, the equation for the interest can be written as,
$12,000(r + 0.005) - $1,000(r) = $885
12000r + 60 - 1000r = 885
11000r = 825
r = 0.075
r = 7.5%
Hence, the rate of investment on $1000 is 7.5$ and on $12,000 is 8%.
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