Problema Solution
if 51.30 in interest is earned on a deposit 950 in one year, then what is the simple interest rate?
Answer provided by our tutors
If a principal of P dollars is deposited for t years at a simple interest rate of r, then the interest, I, will be
I = P*r*t
In our case
I = $51.30
P = $950
T = 1 year
r = ?
From I = P*r*t we get
r = i / (P*t)
r = 51.30 / 950*1
r = 0.054 or 0.054*100 = 5.4 % interest