Question

A $7000 investment earns $840 annual simple interest in one year. What is the annual interest rate?

Answer 1

Interest = Principle * rate * time
I = PRT, but since we are looking for rate (R) let me rearrange this formula.
R = I / PT

P = 7000
I = 840
T = 1

now we sub...
R = 840/(7000 * 1)
R = 840/7000
R = 0.12
but they want it as a percent so multiply it by 100
R = 12%

Answer 2

Thank You for your help.:)

Answer 3

anytime :)