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carolina land trust purchases private land for clean waterway conservation. a benefactor invested $1,000,000 for 15 years and gave the principal and accrued interest of $1,200,000 to the trust. (a) what simple interest rate did the investment earn? (b) had the interest being compounded annually at that rate, what would have been the value of the gift?

Respuesta :

 a.   The Investment earned the simple Rate of 1.33%per annum ( Per year)

 b. The value of gift = $1219190

How the simple interest rate  and  value of the gift should be calculated?

a . Amount = principal + interest

  1200000 = 1000000 + interest

  Interest = 1200000 - 1000000

  Interest Expense = $ 200000

simple interest Rate (per year) = (Interest expense *100)/  

                                                        (principal * Time period in years)

                                                      = (200000 *100)/(1000000*15)

                                                    = 20000000 / 15000000 =1.33%

   

  The Investment earned the simple Rate of 1.33%per annum ( Per year)

b. value of gift  (Apply compound interest formula) =

                                                                                   = 1000000 [tex](1+0.133)^{15}[/tex]

                                                                                    = 1000000 *[tex](1.0133)^{15}[/tex]

                                                                                   = 1000000 *

The value of gift = $1219190

To learn  more about simple interest,  visit;

https://brainly.com/question/25845758

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