Question

After receiving the $2000 back, you decide to invest all $2000 for 10 years and received $600 in simple interest. What was the interest rate of your investment?

Answer 1

To find the interest rate of your investment, you can use the formula for simple interest:

Simple Interest (I) = Principal (P) × Rate (R) × Time (T)

In this case, you have:

Principal (P) = $2000

Simple Interest (I) = $600

Time (T) = 10 years

Let's solve for the interest rate (R):

R = I / (P × T)

R = $600 / ($2000 × 10)

R = $600 / $20,000

R = 0.03 or 3%

So, the interest rate of your investment is 3%.

Answer 2

3%

Explanation:

To find the interest rate of the investment, use the simple interest formula.

Simple Interest Formula

`\large\boxed{I=Prt}`

where:

• I is the total interest accrued.
• P is the principal amount invested.
• r is the interest rate (in decimal form).
• t is the time (in years).

Given values:

• I = $600
• P = $2000
• t = 10 years

Substitute the given values into the formula and solve for r:

`\begin{aligned}600&=2000 \cdot r \cdot 10\\\\600&=20000r\\\\(600)/(20000)&=(20000r)/(20000)\\\\0.03&=r\\\\r&=0.03\end{aligned}`

To express the interest rate as a percentage, multiply the found value of r by 100:

`\textsf{Interest rate}=0.03 \cdot 100=3\%`

Therefore, the interest rate of the investment is 3%.