Question

Justin deposited $2,000 into an account 5 years ago. Simple interest was paid on the account. He has just withdrawn $2,876. What interest rate did he earn on the account?

Answer 1

Answer: $8.76\%$

Step-by-step explanation:

The formula to find the final amount after getting simple interest :

$A=P(1+rt)$, where P is the principal amount , r is rate of interest ( in decimal )and t is time(years).

Given : Justin deposited $2,000 into an account 5 years ago.

i.e. P = $2,000 and  t= 5 years

He has just withdrawn $2,876.

i.e. we assume that A = $2876

Now, Put all the values in the formula , we get

$(2876)=(2000)(1+r(5))\\\\\Rightarrow\ 1+5r=\dfrac{2876}{2000}\\\\\Rightarrow\ 1+5r=1.438\\\\\Righhtarrow\ 5r=0.438\\\\\Rightarrow\ r=\dfrac{0.438}{5}=0.0876$

In percent, $r=0.0876\times100=8.76\%$

hence, He earned $8.76\%$ of interest on account.