Question

If the simple interest on $5000 for 9 years is $3150 then what is the interest rate ?

Answer 1

$\bf ~~~~~~ \textit{Simple Interest Earned} \\\\ I = Prt\qquad \begin{cases} I=\textit{interest earned}\dotfill&\ 3150\\ P=\textit{original amount deposited}\dotfill & \ 5000\\ r=rate\to r\%\to \frac{r}{100}\\ t=years\dotfill &9 \end{cases} \\\\\\ 3150=5000r(9)\implies 3150=45000r\implies \cfrac{3150}{45000}=r\implies 0.07=r \\\\\\ r\%=0.07\cdot 100\implies r=\stackrel{\%}{7}$

Answer 2

The simple interest formula is I=PRT. Plug all of the numbers in.

Interest = 3150

Principal = 5000

Rate = r

Time = 9

3150 = (5000)(r)(9)

Simplify.

3150 = 45000(r)

Divide both sides by 45000.

.07 = r

Move the decimal two places to the right to make it a percentage.

7%