Question

What is the simple interest rate on a $2300 investment paying $1,391.04 interest in 12.6 years? % (round to the nearest tenth of a percent)

Answer 1

To solve for the simple interest rate, we have the following formula below:

`r=(I)/(P* t)*100`

where I = interest, P = principal or the original investment, and t = time in years.

In the problem, here are the given information:

Interest = $1,391.04

Principal = $2,300

Time = 12.6 years

Let's plug in these data to the formula above.

`r=(1,391.04)/(2,300*12.6)*100`
`\begin{gathered} r=(1,391.04)/(28,980)*100 \\ r=0.048*100 \\ r=4.8 \end{gathered}`

Therefore, the simple interest rate on a $2300 investment is 4.8%.