Question

Suppose you have $5000 to invest, and you want to earn $1000 simple interest in 5 years. What is the lowest interest rate that will allow you to do this?

A) 2%
B) 3%
C) 4%
D) 5%

Answer 1

Explanation:

4%

Answer 2

C.

Explanation:

To find the Rate:

R = 100 × S.I/T × P

R = 100 × S.I/T × PR = 100 × 1000/5 × 5000

R = 100 × S.I/T × PR = 100 × 1000/5 × 5000R = 4%

That's C.