Question

What is the interest rate if the principal is $25,000, the interest is $10,875, and the time is 15 years?

Answer 1

Answer:

interest rate = 2.9%

Step-by-step explanation:

the principal is $25,000, the interest is $10,875

Number of years = 15

We use simple interest formula

I = P*r*t

Where I is the interest amount=10,875

P is the principal amount= 25000

r is the interest rate = r

t is the number of years = 15

Plug in all the value in the formula

I = P*r*t

10875 = 25000 * r * 15

10875 = 375000 * r

Divide both sides by 375000

r=0.029

We always write rate of interest in percentage so we multiply by 100

0.029 * 100= 2.9%

So interest rate = 2.9%