After 6 months, $1.78 simple interest was earned on an investment of $890. what was the annual interest rate

Question

Jacquelyn Hopkins

Mathematics

12 May, 10:31

After 6 months, $1.78 simple interest was earned on an investment of $890. what was the annual interest rate

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Answers (1)

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Keaton · Answer 1

First you have to double the simple interest to get the amount earned in 1 year. That gives $3.56 earned and a total balance of $893.56

r = (1/t) (A/P - 1) t=time, A=amount of money with interest, P=amount invested

r = (1/1) ((893.56/890) - 1) = 0.004

r = 0.004

now convert to a decimal to get. 04 = 4%