If nelson invests $5000 for 4 years and earns $600, what is the simple interest rate?
1 answer:
Answer: Simple interest rate = 3%.
Step-by-step explanation: We are given invested amount = $5000.
Number of years of investment = 4 years.
Interest earned = $600.
Simple interest formula.
I = P R T.
Where I is the earned interest, P is the invested amount , R is the rate of interest and T is the time in years.
Plugging values in formula, we get
600 = 5000 × R × 4
600 = 20000R.
Dividing both sides by 20000, we get
0.03 = R.
Multiplying by 100 to convert it in percentage, we get
0.03 × 100 = R
R = 3 %.
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