the equation I=prt solves for the amount of simple interest a bank account receives after a certain period of time. I stands for
interest, P is the principle, r is the percentage rate, and t is the time in years. If after six years seven thousand dollars earns $1,890 in simple interest, what is the percentage rate?
The given formula for simple interest is I=prt where I=simple interest, p=principle, r = percentage rate and t=time. In the problem, we are told that after six years (t=6), $7000 (p=7000) earns $1890 (I=1890). We can then substitute in the values for three of our variable to get the following: 1890 = (7000)(6)r. Multiplying 7000x6 = 42000 giving us 1890 = 42000r. Using inverse operations, we divide both sides of the equation by 42000 to get 0.045 = r. Since r = percentage rate, we need to multiply our decimal by 100 to find the percentage. 0.045 x 100 = 4.5%.
