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What annual interest rate would cause $100 to grow to $125.97 in 3 years?

User Grammilo
by
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1 Answer

5 votes
Would assume Simple Interest.

I = PRT

R = I/PT Where R = Rate, I = Interest, P = Principal, T = Time

P = $100, T = 3 years, Interest, I = Amount - Principal = $125.97 - $100 = $25.97

R = I/PT

R = 25.97/(100*3)

R ≈ 0.0866

To percentage ≈ 0.0866 * 100% ≈ 8.66%

Rate ≈ 8.66%

Hope this helps.
User Vikomall
by
7.2k points