Question

What annual simple interest rate will increase Jacob Davidson’s initial investment of $5,000 to $6,000 in two years?

multiple choice
A)10%

B)5%

C)4%

D)6%

Answer 1

a its 10 percent because of the amount of money he has in his account

Answer 2

Hence, the annual simple interest rate is:

10%

Explanation:

The initial investment(I) of Jacob Davidson=$ 5000.

Time(T)=2 year.

Interest(I') earned by him=His income after investment-His initial investment.

= $ (6000-5000)

= $ 1000.

Now, the rate of interest(R) is given by :

`I'=(I* R* T)/(100)\\\\\\1000=(5000* R* 2)/(100)\\\\1000=100R\\\\R=10\%`

Hence, the annual simple interest rate is:

10%