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If the simple interest on $7,000 for 5 years is $2,800, then what is the interest rate?

User Dan Hensby
by
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1 Answer

14 votes

Answer:

8%

Explanation:

Solving our equation

r = 2800 / ( 7000 × 5 ) = 0.08

r = 0.08

converting r decimal to a percentage

R = 0.08 * 100 = 8%/year

The interest rate required to

accumulate simple interest of $ 2,800.00

from a principal of $ 7,000.00

over 5 years is 8% per year.

User Hasanavi
by
3.7k points