Question

You deposit $2,000 in an account. The account earns $600 simple interest in 8 years.
What is the annual interest rate? Round your answer to the nearest whole percent.

Answer 1

Answer:

4%

Step-by-step explanation:

we know that

The simple interest formula is equal to

$I=P(rt)$

where

I is the Final Interest Value

P is the Principal amount of money to be invested

r is the rate of interest  

t is Number of Time Periods

in this problem we have

$t=8\ years\\ P=\ 2,000\\ I=\ 600\\r=?$

substitute in the formula above

$600=2,000(8r)$

solve for r

$600=16,000(r)$

$r=600/16,000$

$r=0.0375$

Convert to percent

$r=0.0375*100=3.75\%$

Round to the nearest whole percent

4%