Question

If the simple interest on $5000 for 5 years is $1500 then what is the interest rate?​

Answer 1

6%

Explanation:

Simple interest: A = P(1 + rt)

Solve for r: r = (1/t)((A/P) - 1)

Given:

A = $1500 + $5000 = $6500

P = $5000

t = 5 yrs

r = (1/5)((6500/5000) - 1)

= (1/5)(0.3)

= 0.06

0.06 = 6%