Question

What is the interest rate if a principal of $344 earns $57.53 in simple interest in 4 years? Answer as an annual percentage rate rounded to the nearest hundredth

Answer 1

Given:

Principal: $344

Interest = $57.53

Time = 4 years

To find the rate, use the simple interest formula below:

$\text{Interest}=\frac{\text{PRT}}{100}$

Rewrite the equation for R:

$R=\frac{100\ast Interest}{PT}$$\begin{gathered} R\text{ = }\frac{100\ast57.53}{344\ast4} \\ \\ R\text{ = }\frac{5753}{1376} \\ \\ R=\text{ 4.18\%} \end{gathered}$

Therefore, the interest rate is 4.18%

ANSWER:

4.18%