Question

you deposited 8500 dollars in a savings account that earns a simple interest rate what interest rate do you need to be paid if you require 10093.75 after 5 years

Answer 1

we know that

The simple interest formula is equal to

$A=P(1+rt)$

where

A is the Final Investment Value

P is the Principal amount of money to be invested

r is the rate of interest

t is Number of Time Periods

in this problem we have

$t=5\ years\\ P=\ 8,500\\ A=\ 10,093.75\\r=?$

substitute in the formula above

$10,093.75=8,500*(1+r*5)$

solve for r

$5*r=(10,093.75/8,500)-1$

$r=0.0375$

$r=3.75\%$

therefore

the answer is

the rate of interest is $3.75\%$