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Joan invested $1420 at the start of the year and found she had $1621.40 at the end of the year. what is the annual effective yield of her investment

Answer :

you can easily solve this by using a rule of three.

Step 1

let

1420 = 100 %

x=the % at the end of the year

then

at the end of the year, she had

1621.4 = x %

Step 2

make the relation and solve for x

[tex]\begin{gathered} \frac{1420}{100}=\frac{1621}{x} \\ \text{solve for x} \\ 1\cdot1420x=1621\cdot100 \\ 1420x=162100 \\ x=\frac{162100}{1420} \\ x=114.1549 \end{gathered}[/tex]

so, at the end of the year she had 114.15 %

Step 3

find the yield

[tex]\begin{gathered} \text{Yield}=\text{ final percentage-100\%} \\ \text{Yield}=114.15\text{ -100} \\ \text{Yield}=14.15 \end{gathered}[/tex]

so, the answer is 14.15 %

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