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Homework answers / question archive / A child learning to save money invested a capital of $ 250 at a nominal rate of 0
A child learning to save money invested a capital of $ 250 at a nominal rate of 0.0825 with simple interest. If he earned $ 11.98 at the maturity date, how many days was the term of the deposit? Round to nearest one.
Note: we can assume an year consists of either 360 days or 365 days.
First, let us assume year, consists of 360 days.
simple interest on an investment = amount invested * nominal rate * number of days invested / 360 days.
here,
interest, amount invested, nominal rate are given, number of days invested shall be known.
=>$11.98 = $250 * 0.0825 *number of days / 360
=>11.98 = 20.625 * number of days /360
=>0.58084848 = number of days / 360
=>209.105453 = number of days.
=>209 days approximately.
if 360 days are assumed in an year the term of the deposit is for 209 days.
Alternate solution, if we assume year consists of 365 days:
interest = amount invested * nominal rate * number of days /365
=>$11.98 = 250 * 0.0825 * number of days /365
=>$11.98 = 20.625 * number of days /365
=>0.58084848 = number of days /365
=>number of days = 212 days.
IF 365 days are assumed in a year the term of investment is 212 days.
