5. in the first year of a $10,000 investment the interest rate was 6%. all earned interest remained
invested for the second year, and the interest rate increased to 7%. what was the percent increase of
the entire investment after two years?
16.7%
1%
13.4%
70%

The % increase in investment after two years is 13.05 %

Step-by-step explanation:

Given as :

The principal investment = p = $10,000

The rate of interest = r = 6%

The time period  t = 1 year

Let The Amount paid after 1 year = $

Let The % increase in investment after two years = x

Now, According to question

From Compounded Interest method

Amount = Principal ×

Or, = p ×

Or, = $10,000 ×

Or, = $10,000 ×

Or, = $10,000 × 1.06

∴ = $10,600

So, The Amount paid after 1 year = = $10,600

Now, Interest earn = Amount - Principal

Or, I = $10,600 - $10,000

i.e I = $600

So, This interest earn is invested for second year

So, Principal for second year = $10,600 + $600

i.e Principal for second year = $11,200

The rate of interest = r = 7%

The time period  t = 1 year

Let The Amount paid after 1 year = $

Now, According to question

From Compounded Interest method

Amount = Principal ×

Or, = p ×

Or, = $11,200 ×

Or, = $11,200 ×

Or, = $11,200 × 1.07

∴ = $11,984

So, The Amount paid after 1 year = = $11,984

Now, Again

% increase in investment after two years = ×100

Or , x = ×100

Or , x = ×100

∴ x = 13.05 %

So, % increase in investment after two years = x = 13.05 %

Hence,The % increase in investment after two years is 13.05 % Answer

answer: finding the extract measurements and knowing the points

step-by-step explanation: