Question

Find the annual interest rate. Round your answer to the nearest hundredth of a percent. I=$160.67, P=$2000, t=8 monthsI=$160.67, P=$2000, t=8 months

Answer 1

Answer:

The annual interest rate is 12.05%.

Step-by-step explanation:

The simple interest is given by the formula:

$I=\dfrac{P\times R\times T}{100}$

Where I denotes interest.

P denotes the principal amount.

R denotes the rate of interest

and T denotes the time period.

I=$160.67, P=$2000, t=8 months=8/12 years (Since 12 months=1 year so 1 month=1/12 year)

$160.67=\dfrac{2000\times R \times \dfrac{8}{12}}{100}\\\\R=12.05%$

Hence, the annual interest rate is 12.05%.

Answer 2

Let r be the annual interest rate such that,
                              I = P x r^t
For the first case,
                            160.67 = (2000) x r*8/12    ; r = 0.02277
The second case looks pretty the same with that of the first. So, the answer should just be the same.