35.4k views
0 votes
You deposit $2,000 in an account. The account earns $600 simple interest in 8 years.

What is the annual interest rate? Round your answer to the nearest whole percent.

1 Answer

3 votes

Answer:

4%

Explanation:

we know that

The simple interest formula is equal to


I=P(rt)

where

I is the Final Interest Value

P is the Principal amount of money to be invested

r is the rate of interest

t is Number of Time Periods

in this problem we have


t=8\ years\\ P=\$2,000\\ I=\$600\\r=?

substitute in the formula above


600=2,000(8r)

solve for r


600=16,000(r)


r=600/16,000


r=0.0375

Convert to percent


r=0.0375*100=3.75\%

Round to the nearest whole percent

4%

User Janemarie
by
8.0k points

No related questions found

Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.

9.4m questions

12.2m answers

Categories