I need someone to explain how to do this

A $6000 investment earns $690 simple interest in two years. What is the annual interest rate?

A.
1.15%

B.
5.75%

C.
11.5%

D.
57.5%

Question

I need someone to explain how to do this



A $6000 investment earns $690 simple interest in two years. What is the annual interest rate?
 
 A.
1.15%
 
 B.
5.75%
 
 C.
11.5%
 
 D.
57.5%

okdutchman7 · Answer

First divide $690 by 2 because the interest rate has been compounded over 2 years.

okdutchman7 · Answer

@LoveIt

anonymous · Answer

345 @okdutchman7 Wouldn't I multiply them though?

okdutchman7 · Answer

No because interest is compounded on a yearly basis

okdutchman7 · Answer

The next step is to divide 345 by 6000.

okdutchman7 · Answer

^This is the amount of interest that is received each year.

okdutchman7 · Answer

@LoveIt Let me know when you are done with that.

anonymous · Answer

o hold on

rebeccaxhawaii · Answer

mm

anonymous · Answer

17.3913...

anonymous · Answer

its 5.75%

anonymous · Answer

just solved it

okdutchman7 · Answer

@Joshtray. No direct answers.

anonymous · Answer

oh sorry, 0.0575

okdutchman7 · Answer

It can't be 17.3913... because 345 is smaller than 6000. Try it again.

okdutchman7 · Answer

That's right and when multiplied by 100 leaves you with 5.75%

okdutchman7 · Answer

Good Job! @LoveIt

anonymous · Answer

Thanks! I kind of just realized it said ANNUAL interest so now it makes sense, heh

okdutchman7 · Answer

I'm glad that you understand, and I was happy to help anyway.

anonymous · Answer

Rate = 100 x Interest$$Rate = \frac{100 \times Interest }{ Principle \times Time }$$

anonymous · Answer

Thanks Joshtray!