Question

Diane invested 3000 in a fund for 4 years and was paid simple interest the total interest that she received on the investment was $480 as a percentage what was the annual interest rate of her investment?

Answer 1

4.2%

Explanation:

If the total interest for 4 years is 480, then for 1 year is: 480/4 = 120. Now, we calculate the percentage of 120 of 3000 by division: 120/3000 = 0.0416666... or rounded to 0.042, which is equal to 4.2%. If you need to know, the equation equal to this is: 120 = 0.042 x 3000.