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You invested $9,000 and received yearly interest of $450. What is your interest rate on your investment ?

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Final answer:

The interest rate on the investment is 5%, calculated using the simple interest formula by dividing the yearly interest earned by the principal amount.

Step-by-step explanation:

To calculate the interest rate on your investment, you can use the formula for simple interest, which is I = PRT, where I is the interest earned, P is the principal amount invested, R is the interest rate, and T is the time period in years. Here, we know the interest earned (I) is $450, and the principal (P) is $9,000. Assuming the interest is earned over one year (which is typical unless otherwise stated), then T would be 1. To solve for R, the equation is rearranged to R = I / (PT).

Plugging the numbers into the equation, we get R = $450 / ($9,000 × 1), which simplifies to R = $450 / $9,000, and further reduces to R = 0.05 when calculated. To express this as a percentage, we multiply by 100 and get an interest rate of 5%.

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