Question

Find the interest rate, I, on a given security that costs $100 and that will return $150 after 10 years.

Answer 1

Rate = 6.666%

Step-by-step explanation:

First, the formula of the simple interest rate is:

R = I/PT x 100%

Put in the numbers:

R = $100/($150 x 10 years) x 100%

Then calculate:

R = $100/$1500 x 100%

R = 100/15%

R = 6.666%