Question

If the simple interest on $7,000 for 4 years is $1,400, then what is the interest rate?

Answer 1

R=5%/year

Explanation:

R = 5%/year

Equation:

r = I / Pt

Calculation:

Solving our equation

r = 1400 / ( 7000 × 4 ) = 0.05

r = 0.05

converting r decimal to a percentage

R = 0.05 * 100 = 5%/year

The interest rate required to

accumulate simple interest of $ 1,400.00

from a principal of $ 7,000.00

over 4 years is 5% per year.