Question

If a $3,500 investment earns $210 over 3 years, what is the annual interest rate?

Answer 1

The annual rate of interest is 2 %

Explanation:

Given as :

The investment amount = $ 3,500

The Interest earn on investment = $ 210

The time period = 3 years

Let The annual interest rate = R

From simple interest method :

Simple Interest =
`(Princpal* Rate* Time)/(100)`

Or, 210 × 100 = 3500 × R × 3

Or, R =
`(210* 100)/(3500* 3)`

Or, R =
`(21000)/(10500)` = 2

Hence The annual rate of interest is 2 % Answer