Question

Salma invested $8000 in a fund for 6 years and was paid simple interest. The total interest that she received on the investment was $1400. As a percentage, what was the annual interest rate of her investment?

Answer 1

9514 1404 393

Answer:

about 2.917%

Explanation:

The simple interest formula can be used. Fill in the known values and solve for the unknown.

I = Prt . . . . principal P invested at rate r for t years

1400 = 8000(r)(6)

r = 1400/48000 = 7/240 = 0.0291666...

Salma's interest rate was about 2.917% per year.