Question

If a $3,500 investment earns $210 over 3 years, what is the annual interest rate?

Answer 1

Answer:

The annual rate of interest is 2 %  

Step-by-step explanation:

Given as :

The investment amount = $ 3,500

The Interest earn on investment = $ 210

The time period = 3  years

Let The annual interest rate = R

From simple interest method :

Simple Interest =  $\frac{Princpal\times Rate\times Time}{100}$

Or, 210 × 100 = 3500 × R × 3

Or, R = $\frac{210\times 100}{3500\times 3}$

Or, R = $\frac{21000}{10500}$ = 2

Hence The annual rate of interest is 2 %   Answer