Question

At what rate did you invest your $1000, if it made you $120 in interest over the course of 3 years? (Write your answer as a percent without the percent sign)

Answer 1

The rate at which the $1000 is invested is 4%.

Since the answer is required to be written without the percent sign, it therefore implies that he rate at which the $1000 is invested is 4.

Explanation:

Amount invested = $1000

Total interest income over the course of 3 years = $120

Number of years = 3

Annual interest income = Total interest income over the course of 3 years / Number of years = $120 / 3 = $40

The interest ate on the $1000 invested can now be calculated as follows:

Interest rate = (Annual interest income / Amount invested) * 100 = ($40 / $1000) * 100 = 0.04 * 100 = 4%

Therefore, the rate at which the $1000 is invested is 4%.

Since the answer is required to be written without the percent sign, it therefore implies that he rate at which the $1000 is invested is 4.