Question

Keisha invested $7000 in a fund for 6 years and was paid simple interest. The total interest that she received on the investment was $2100. As a percentage, what was the annual interest rate of her investment?

Answer 1

We will have the following:

$\begin{gathered} 9100=7000(1+r(6))\Rightarrow\frac{13}{10}=1+6r \\ \\ \Rightarrow6r=\frac{3}{10}\Rightarrow r=\frac{1}{20} \\ \\ \Rightarrow r=0.05 \end{gathered}$

So, the annual interest rate was 5%.