an investment of 3000 will pay a total of 600dllrs simple interest after 5yrs. what is its annual interest rate?
I = PRT
600 = 3,000 * r * 5
Solve for r
40 annual interest rate
You've misplaced the decimal point. The interest rate is 4%.
To calculate the annual interest rate, we need to use the formula for simple interest:
Interest = Principal * Rate * Time
Given that an investment of $3000 has earned a total interest of $600 over a period of 5 years, we can rearrange the formula to solve for the rate as follows:
Rate = Interest / (Principal * Time)
Substituting the given values:
Rate = $600 / ($3000 * 5)
Rate = $600 / $15000
Rate = 0.04 or 4%
Therefore, the annual interest rate on this investment is 4%.