Question

What annual simple interest rate will increase Johnson Alexander's initial investment of $10,000 to $12,000 in five years? (Hint: Use the formula I = prt and substitute known values to find I.)
A. 5%
B. 3%
C. 3.5%
D. 4%

Answer 1

I = prt
2000 = 10,000 * r * 5
2000 = 50,000 * r
divide both sides by 50,000
.04 = r
The rate is 4%
LETTER D