Problem

What is the simple interest rate on a $\$ 2500$ investment paying $\$ 2,148.75$ interest in 19.1 years? $\%$ (round to the nearest tenth of a percent)

Solution

Step 1 :The formula for simple interest is \(I = PRT\), where \(I\) is the interest, \(P\) is the principal amount, \(R\) is the rate, and \(T\) is the time. We can rearrange this formula to solve for \(R\): \(R = I / (PT)\).

Step 2 :We know that \(I = \$2,148.75\), \(P = \$2500\), and \(T = 19.1\) years. We can substitute these values into the formula to find \(R\).

Step 3 :Substituting the values we get \(R = 2148.75 / (2500 * 19.1)\)

Step 4 :Solving the above expression we get \(R = 0.045\)

Step 5 :To convert the rate to a percentage, we multiply by 100. So, \(R_{percent} = 0.045 * 100 = 4.5\)

Step 6 :Final Answer: The simple interest rate on a \$2500 investment paying \$2148.75 interest in 19.1 years is \(\boxed{4.5\%}\)

From Solvely APP
Source: https://solvelyapp.com/problems/16543/

Get free Solvely APP to solve your own problems!

solvely Solvely
Download