At what rate of simple interest will $500 accumulate to $615 in 2.5 years?

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Asked: November 7, 20202020-11-07T08:46:02+00:00 2020-11-07T08:46:02+00:00

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acedstud · Answer 1 · 2020-11-07T09:04:23+00:00

acedstud

This answer was edited.

This question deal with simple interest.

The total amount (A) accumulated in simple interest after t years is given by $A=P(1+rt)$ , where P is the principal.

Given: $P=$500$ , $A=$615$ , $t=2.5$ years.

Substituting for $P$ , $A$ , and $t$ , into the formula $A=P(1+rt)$ , we have:

$615=500(1+2.5r)$

Dividing both sides by 500 we have:

$\frac{615}{500}=1+2.5r$
$\Rightarrow1.23=1+2.5r$

Subtracting 1 from both sides, we have:

$0.23=2.5r$

Dividing both sides by 2.5, we have:

$\frac{0.23}{2.5}=r$

$\Rightarrow r=0.092$

Therefore, the rate is $0.092\times100\%=9.2\%$ .

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