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3 votes
I = Prt

to solve the following problem. If a $1,200 investment earns
$210 over 5 years, what is the annual interest rate?

1 Answer

3 votes

Answer:


r=3.5\%

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=5\ years\\ P=\$1,200\\ I=\$210\\r=?

substitute in the formula above


210=1,200(5r)

solve for r


r=210/6,000


r=0.035

convert to percentage (multiply by 100)


r=3.5\%

User Igor Belyakov
by
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