Question

A man earns $112 interest in one year on an investment of $1400. What was his rate of interest?

Answer 1

8%

Explanation:

Interest = $112

Principal = $1400

Rate = Percentage Per Year

Time = 1 Year

I = PRT

`112 = (1400 )(R)(1)`

Multiply everything together...

`(112)/(1400) = (1400R)/(1400)`

Divide both sides by 1400.

`(112)/(1400) = R`

Simplify.

`(112)/(1400) = (2)/(25)`

`(2)/(25) = 0.08`

Simplify the fraction. Feel free to flip the equation (Put the R on the right side of the = instead of the left).

`(2)/(25) = 0.08`

Change the fraction into a decimal.

`R = 0.08`

Turn this number into a percentage and we have our answer:

R = 8% per year