Final answer:
Debra's annual interest rate for her investment was calculated using the simple interest formula. After finding the total interest earned and knowing the investment amount and time period, the annual rate was found to be 3%.
Step-by-step explanation:
To calculate the annual interest rate of Debra's investment, we can use the formula for simple interest: I = PRT, where I is the interest earned, P is the principal amount invested, R is the rate of interest per period, and T is the time the money is invested for.
Debra received a total of $960 in interest for an investment of $8000 over 4 years. Plugging these values into the formula, we have 960 = 8000 × R × 4. Solving for R, we get R = 960 / (8000 × 4), which calculates to an annual interest rate of 0.03 or 3%.
Similarly, for a question asking about the total amount of interest from a $5,000 loan after three years with a simple interest rate of 6%, you would calculate the interest by multiplying the principal ($5,000) by the rate (6%) and the time (3 years), giving an interest amount of $900.