Question

If $500 yields $51.76 in simple interest over 7yrs, what is the annual rate? Answer need to be rounded to the nearest thousandth

Answer 1

1.5%

Explanation:

Principal, P = $500

Simple interest S.I. = $51.76

Period, T = 7 years

Simple interest = P*R*T / 100

Let's make rate, R the subject of formula

R = 100 * S.I. / P * T

Slot in the respective values

R = 100 * 51.76 / 500 * 7

R = 1.5%

Answer 2

The annual rate of interest is 1.479%.

Explanation:

Given,

Principle (P) = $500

Interest (I) = $51.76

Time (T) = 7 years

To find out the rate of interest (R).

Formula

Simple interest (I) =
`(PTR)/(100)`

According to the problem,

`(PTR)/(100)` = 51.76

or, R =
`(51.76X100)/(PT)`

or, R =
`(51.76X100)/(500X7)`

= 1.4788 = 1.479% (approx)