Question

An account earns simple interest. Find the annual interest rate.

I = $30

P = $250

T = 3 years

The annual interest is ?%

Answer 1

Ok, it turns out that:

I=P*r*T

"r" stands for rate.

Therefore:

$30=$250*r*3y

r*3y=($30)/($250)

r*3y=3/25

ry=1/25

r=1/25 * (1/y)

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This means that the annual interest rate is:

4%

Answer 2

Answer: 4%

Explanation:

The formula to calculate simple interest is given by :-

`\text{I}=P\cdot r\cdot t`, where P is the Principal amount, r is the rate of interest in decimal and t is the time.

Given: I = $30

P = $250

T = 3 years

Substitute the given values in the above formula , we get

`30=250\cdot r\cdot 3\\\Rightarrow\ r=(30)/(250*3)\\\Rightarrow\ r=0.04`

In percent,
`r=0.04*100=4\%`

Hence, the annual interest = 4%.