Bob invested $5,000 at a simple interest rate. In 15 years, the account was worth $6,500. What was the interest rate?

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Mathematics

Thelma

1 October, 03:48

Bob invested $5,000 at a simple interest rate. In 15 years, the account was worth $6,500. What was the interest rate?

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Liliana Whitney · Answer 1

The interest rate is 2%. To solve, plug your variables into the simple interest rate formula, r = I/Pt, where r represents the rate, I represents interest, P represents your principal (starting) amount of money, and t represents time, and then simplify. (Subtract the final amount from the principal amount to get your interest, $1500.)

r = 1500 / (5000*15)

r = 1500/75000

r =.02 or 2%