Question

The formula for determining simple interest is i =prt, , wherei is the interestp is the principalr is the interest rate as a decimal. For example, if the interest rate is 3%, then r = 0.03.t is the timeUnits must be consistent. If the unit for p is dollars, the unit for i is dollars and the unit for t is years, what must the units for r be? units= dollars/ years Solve this formula for r.r=____3000 dollars are invested at a simple interest rate of 4 percent for 5 years. How much interest is earned, to the nearest cent?______ dollarsWhat is the interest rate, as a percent, that is necessary to earn 300 dollars in simple interest if 2000 dollars are invested for 2 years, to 1 decimal place?_____ % year

Answer 1

$\begin{gathered} r=\frac{I}{Pt} \\ \\ \ 600 \\ \\ 75\% \end{gathered}$

1) Based on this formula:

$I=Prt$

2) We can solve for r, this way:

$\begin{gathered} I=Prt \\ \\ Prt=I \\ \\ \frac{Prt}{Pt}=\frac{I}{Pt} \\ \\ r=\frac{I}{Pt} \end{gathered}$

3) We can solve this question, by plugging into the formula the given data and solving it for "r"

3000 dollars are invested at a simple interest rate of 4 percent for 5 years. How much interest is earned, to the nearest cent?

______ dollars

$\begin{gathered} I=Prt \\ \\ I=3000\times0.04\times5 \\ \\ I=600 \end{gathered}$

4) For the following question:

What is the interest rate, as a percent, that is necessary to earn 300 dollars in simple interest if 2000 dollars are invested for 2 years, to 1 decimal place?

_____ % year

$\begin{gathered} I=Prt \\ \\ 300=2000\times r\times2 \\ \\ 300=400r \\ \\ \frac{300}{400}=\frac{400r}{400} \\ \\ r=\frac{3}{4}=0.75=75\% \end{gathered}$