Question

Suppose Johnny invests $41,745 into an account, which has been earning interest for many years and he now has a total of $39,974. In two or more sentences explain why a negative number would/wouldn’t be reasonable in the solution of the rate of the investment.

Answer 1

The interest means the amount that adds up to your previous capital that you invest in the past. If you invest an amount of money and get an interest revenue out of it, the amount of your capital will be increased, not decreased.