Question

After 12 years, a deposit of $10,000 into your college account has earned $6,000 in interest payments. What simple interest rate did the account earn

Answer 1

5%

Explanation:

I = PRT/100 where I = interest, P = initial deposit, R = the rate in %, T = number of years.

So substituting the given values:

6000 = 10000*R* 12/100

10000*12*R = 100*6000

R = 100*6000 / (10000 * 12)

R = 600000/120000

= 5%