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 $700 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 8% p.a. Write down the simple interest formula and change the formula so that the time period Tis the subject. Hence find the investment time required so that he earns interest to the value of at least $700. 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 $700. The compound interest formula is A = PR". Determine the values of A, P and Rfor this situation. Under these different conditions, find the investment time required so that he earns interest to the value of at least $700. 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 $700 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 8% p.a. Write down the simple interest formula and change the formula so that the time period Tis the subject. Hence find the investment time required so that he earns interest to the value of at least $700. 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 $700. The compound interest formula is A = PR". Determine the values of A, P and Rfor this situation. Under these different conditions, find the investment time required so that he earns interest to the value of at least $700. Give your answer as a whole number of quarters.
Calculus For The Life Sciences
2nd Edition
ISBN:9780321964038
Author:GREENWELL, Raymond N., RITCHEY, Nathan P., Lial, Margaret L.
Publisher:GREENWELL, Raymond N., RITCHEY, Nathan P., Lial, Margaret L.
Chapter2: Exponential, Logarithmic, And Trigonometric Functions
Section2.1: Exponential Functions
Problem 53E: Interest Ron Hampton needs to choose between two investments: One pays 6% compounded annually, and...
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Transcribed Image Text: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 $700 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 8% p.a.
i
Write down the simple interest formula and change the formula
so that the time period Tis the subject.
ii
Hence find the investment time required so that he earns interest to the value
of at least $700. 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 $700.
i
The compound interest formula is A = PR". 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 $700. Give your answer as a whole
number of quarters.
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