Question

Sarah invested $500 for 3 years at the investment maturity its value was 578 what was the annual simple interest rate

Answer 1

the interest rate is 25

Answer 2

1) for this exercise you must apply the following formula,

I = C ×i×n, where I is the interest, C is the capital initial, i is the rate of interest, and n is time

2) second step

you must× calculate the I = M-C, where M is the final amount and C is the capital

I = 578-500 = 78

3) third step

substitute the values in equation 1

I = C ×i ×n

78= 500×i×3⇒i =78/(500×3)⇒i= 0,052 ⇒ 0,05×100 = 5,2% annual interest