Question

Over the last 4 years, Micheal has earned $240 interest on an initial investment of 2,000. What simple annual interest rate in the bank paying on this account?

Answer 1

3% simple interest

Explanation:

Simple interest formula is:

I = P*r*t

P = $2000

r = ?

t = 4

I = $240

240 = 2000 * r * 4

60 = 2000r

r = 60/2000

r = 3/100 = 0.03 = 3%