Question

A bank says you can double your money in 10 years if you put $1,000 in a simple interest account. What annual interest rate does the bank pay?

Answer 1

simple interest is given by \[I = Prt\]where \(P\) is principal balance, \(r\) is interest rate expressed as a decimal, and \(t\) is the number of periods (years, here)

To double our money, \(I = P\) or \[P = Prt\]Solve for \(r\).