Question

A sum of $9, 000 paid into a bank account for two months (61 days) to attract simple interest will produce $9, 020 at the and of the term. Find the interest rate r and the return on this investment

Answer 1

Rate of interest will be 1.33 %

Return on this investment =
`=(9020-9000)/(9000)=0.222` %

Explanation:

We have given principle amount P = $9000

Time = 61 days =
`(61)/(365)=0.167\ years`

We have to find the rate of interest

Total amount produce at the end of term = $9020

So interest = $9020 - $9000 = $20

We know that simple interest
`=(principle\ amount* rate*\ time)/(100)`

`20=(9000* rate*\\ 0.167)/(100)`

`rate=1.33` %

Return on this investment =
`=(9020-9000)/(9000)=0.222` %