Question

Use the simple interest formula to solve for the missing values below:

Answer 1

The simple Interest formula is given as

`I=(p* r* t)/(100)`

Where I = the simple interets = $2500

p = principal, that is money invested = $5000

r = interet rate = ?

t = time in years = 10 years

So, this means that we are to find r, the interet rate

From the formula

`I=(p* r* t)/(100)`

We will make r the subject. That is make it stand alone, this becomes

`\begin{gathered} I=(p* r* t)/(100) \\ p* r* t=100I \\ \text{prt = }100I \\ \text{divide through by p and t} \\ (prt)/(pt)=(100I)/(pt) \\ \\ r=(100I)/(pt) \end{gathered}`

Inputing the values we have

`\begin{gathered} r=(100I)/(pt) \\ r=(100*2500)/(5000*10) \\ r=(250000)/(50000) \\ r=5\text{percent } \end{gathered}`

Therefore, r = 5%