Question

To find simple interest, you multiply the principal (in dollars), the interest rate (as a decimal), and the time in years.

The equation 22.80 = 300 •019•4 shows how to find the simple interest for a certain account after 4 years. What
is the interest rate (as a percent)? How much is the simple interest? What is the principal?
What is the interest rate (as a percent)?
A. 1.9%
B. 22.80%
C. 0.019%
D. 300%

Answer 1

Here we have $400 originally and it is invested at an interest rate of 0.015 for 4 years.

Therefore we can say that the interest rate is 0.015 * 4 * 100 = 6% for the 4 years.

Simple interest is 6% / 4 = 1.5%.

And the principal is $400.