Question

What simple interest rate is needed for $1000 to grow to $1071.25 in 9 months?

Answer 1

Answer:

9.5%

Step-by-step explanation:

Use the formula I = Prt

I is the interest (unknown), P is the principal (1000), rate is the percent (unknown), and t is time in years (9/12).

9 months is a fraction of a year. There are 12 months in a year, so our fraction is 9/12. You can reduce this fraction by dividing by 3. The fraction reduced is 3/4. You can also use the decimal which is .75.

First we need to solve how much interest we earned. 1071.25 is the balance, so we need to subtract the principal from the balance.

1071.25 - 1000 = 71.25

Plug the numbers in to the formula. We are solving for r.

71.25 = 1000(.75)r

71.25 = 750r

71.25/750 = 750r/750

r = 0.095

Convert the decimal to a percent by moving the decimal two places right.

0.095 = 9.5%

Answer 2

Use the formula | = Prt
I is the interest (unknown), P is the principal
(1000), rate is the percent (unknown), and t is
time in years (9/12).
9 months is a fraction of a year. There are 12
months in a year, so our fraction is 9/12. You can
reduce this fraction by dividing by 3. The fraction
reduced is 3/4. You can also use the decimal
which is .75.
First we need to solve how much interest we
earned. 1071.25 is the balance, so we need to
subtract the principal from the balance.
1071.25 - 1000 = 71.25
Plug the numbers in to the formula. We are
solving for r.
71.25 = 1000(.75)r
71.25 = 750r
71.25/750 = 750r/750
r= 0.095
Convert the decimal to a percent by moving the