Question

Find the annual interest rate

Answer 1

The annual interest rate is 6.2%.

Solution:

Given data:

Interest = $310

Principle = $1000

Time = 5 years

To find the annual interest rate:

Simple Interest formula:

$S.I=\frac{PRT}{100}$

Substitute the given values in the formula, we get

$310=\frac{1000\times R \times5}{100}$

Do cross multiplication.

$310 \times 100=1000\times R \times5$

Divide both sides of the equation by 1000, we get

$\frac{310 \times 100}{1000}=\frac{1000\times R \times5}{1000}$

$31=R\times 5$

Divide by 5 on both sides of the equation, we get

$\frac{31}{5}=\frac{R\times 5}{5}$

$6.2=R$

R = 6.2%

Hence the annual interest rate is 6.2%.