Question

The simple interest on an investment of $2100 over 15 months is $178.50.

If the annual interest rate is r, find r as a percentage correct to one decimal place.

Answer 1

We can use the formula for simple interest:

I = Prt

where I is the interest, P is the principal (initial amount), r is the interest rate per year (as a decimal), and t is the time in years.

In this case, we are given:

P = $2100

t = 15/12 years (since the time is given in months)

I = $178.50

Substituting these values into the formula, we get:

178.5 = 2100r(15/12)

Simplifying, we get:

r = 178.5 / (2100 * 5/4) = 0.054 (rounded to three decimal places)

To express r as a percentage, we multiply by 100:

r = 5.4%

Therefore, the annual interest rate is 5.4%, correct to one decimal place.

Explanation: