Question

Marcus invested $2000 in a bank account earning simple interest. The interest, I, he has after t years at an interest rate r is given by this equation.

l = 2000 rt



After 2 years, the total amount in the account was $2160. What was the annual interest rate?

Answer 1

Given that ,

• I = 2000rt

annual interest rate after 2yrs .

• total = $ 2160
• t = 2yrs
• R = ?

Now,

interest amount is

• $2160-$2000 = $160

Now,

annual interest rate is ;

• 160 = 2000 × 2r
• 160 = 4000r
• r = 160/4000
• r = 0.04
• r = 0.04×100% = 4%

the annual rate of interest is 4%

Answer 2

• 4%

Explanation:

Given

The equation for simple interest:

• I = 2000rt

And values

• Total = $2160
• t = 2
• r = ?

Solution

Interest amount is

• $2160 - $2000 = $160

Solving for annual interest rate

• 160 = 2000*2r
• 160 = 4000r
• r = 160/4000
• r = 0.04
• 0.04*100% = 4%

Annual interest rate is 4%