Question

What is the simple interest rate for a $5,000 investment

that become $5,750 at the end of 2 years?

Answer 1

Answer: the answer is r=7.5%

Explanation:

You get the formula A=P(1+nr) where A is the accumulated amount: 5750, P is the principal: 5000, n is the amount of years: 2, and r is the rate: unknown

Now you plug in what you know:

5750=5000(1+2r)

Divide 5000 on both sides

Decimal form: 1.15=1+2r

Subtract -1 on both sides

0.15=2r

And lastly divide by 2 on both sides

0.075=r

BUT WHEN FINDING THE RATE ALWAYS MAKE IT A PERCENTAGE

r=0.075*100=7.5%