If you invest money, after a certain period of time you’ll get interest. For example, if you invest $2,000 at 5% annual interest rate, in a year you will have $2,000∙0.05=$100 of annual simple interest in addition to the original amount.
If you invest $300.00 and your annual interest is $27, what is the interest rate?
Total = Principal * (1+rate)^years Total = 300.00 * 1 + rate If we earn $27 interest then total = 327 327 = 300 + (1 + rate) 327/300 = 1 +rate 1.09 so rate = 1.09 minus 1 or .09 which equals 9%
