Question

"You put $5000 in an account. The account earns $2250 simple interest in 10 years. What is the annual interest rate? Write the interest rate as a percent.

Answer 1

To find the annual interest rate, we can use the formula for simple interest. Plugging in the given values, the annual interest rate is 4.5%.

Step-by-step explanation:

To find the annual interest rate, we can use the formula for simple interest: Interest = Principal × Rate × Time.

In this case, the principal is $5000, the interest is $2250, and the time is 10 years. Plugging these values into the formula, we get: $2250 = $5000 × Rate × 10.

To solve for the rate, we divide both sides of the equation by $5000 × 10, giving us: Rate = $2250 / ($5000 × 10).

Calculating this expression, we find that the rate is 0.045, or 4.5% when expressed as a percentage.