Question

You deposited $4500 dollars in a savings account that earns a simple interest rate. What interest rate do you need to be paid, if you require $5445 after 7 years.

Answer 1

R = 3%/year
Equation:r = (1/t)(A/P - 1)
Calculation:Solving our equation:r = (1/7)((5445/4500) - 1) = 0.03r = 0.03
Converting r decimal to R a percentageR = 0.03 * 100 = 3%/year
The interest rate required to get a total amount, principal plus interest, of $5,445.00 from simple interest on a principal of $4,500.00 over 7 years is 3% per year.