Question

Bella earned $216 in interest after 4 years on a principal of $1,500. What is her interest rate?

Answer 1

Answer: 3%

Explanation:

216 / 1500 = 14.4

14.4/ 48 months = .003

.003 x 100 = 3%

Answer 2

R = 148.6111%/year

Equation:

r = (1/t)(A/P - 1)

Calculation:

Solving our equation:

r = (1/4)((1500/216) - 1) = 1.48611111

r = 1.48611111

Converting r decimal to R a percentage

R = 1.48611111 * 100 = 148.6111%/year

The interest rate required to get a total amount, principal plus interest, of $1,500.00 from simple interest on a principal of $216.00 over 4 years is 148.6111% per year.