Mariska was comparing her options for investment. One choice she was looking at showed that her principal of $1,875 over 10 years would earn $1,125 in interest giving her a total of $3,000 at the end of the investment period. What interest rate is being used to calculate this investment?

Question

Sterling Lloyd

Mathematics

16 May, 22:29

Mariska was comparing her options for investment. One choice she was looking at showed that her principal of $1,875 over 10 years would earn $1,125 in interest giving her a total of $3,000 at the end of the investment period. What interest rate is being used to calculate this investment?

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Answers (1)

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Silas Noble · Answer 1

Answer: 6%

Step-by-step explanation:

Principal = $1875

Time = 10 years

Interest = $1125

Rate = Unknown

Recall that,

Interest = (Principal*Rate*Time) / 100

I = PRT/100

100I = PRT

R = (100*I) / PT

Rate = (100 * 1125) / (1875 * 10)

Rate = 112500/18750

Rate = 6%

The rate is 6%