Question

$5,000 was invested at a simple intrest rate. In 15 years, the account was worth 65 hundred dollars. What wss the intrest rate?​

Answer 1

The interest rate was 2%

Explanation:

we know that

The simple interest formula is equal to

`A=P(1+rt)`

where

A is the Final Investment Value

P is the Principal amount of money to be invested

r is the rate of interest

t is Number of Time Periods

in this problem we have

65 hundred dollars=$6,500

so

`t=15\ years\\ P=\$5,000\\ A=\$6,500\\r=?`

substitute in the formula above

`6,500=5,000(1+15r)`

solve for r

`(6,500)/(5,000)=(1+15r)`

`1.3=(1+15r)`

`15r=1.3-1`

`15r=0.3`

`r=0.02`

Convert to percentage

`r=0.02*100=2\%`