Question

$5000 was invested at a simple interest rate. In 15 years the account was worth 65 hundred dollars.What was the interest rate.

Answer 1

Simple interest uses the equation/formula A=P( 1 + RT) where A = the amount after T years, T = the number of years, R = the interest rate, and P = Principal amount of what you started with. "65 hundred" = 6500

Just plug in to get 6500 = 5000(1 + 15R). Distribute to get 6500 = 5000 + 75000R. Subtract 5000 both sides then divide by 75000 to isolate the R.

You get 1500/75000 = R. R = 0.02 or 2%

The interest rate is 2%