Question

if you put 2000 in a simple interest account. After 6.5 years your balance in the account is 2325. what is the simple interest rate on the account?

Answer 1

2.5%

Explanation:

The account balance is given by ...

A = P(1 +rt) . . . . principal P invested for t years at rate r

Solving for r, we find ...

(A/P -1)/t = r

r = (2325/2000 -1)/6.5 = 0.025 = 2.5%

The simple interest rate on the account is 2.5%.