Problema Solution
what is the simple interest rate if $119.95 in interest is earned on a deposit of $1366.87 in one year?
Answer provided by our tutors
P = $1366.87 principal
I = $119.95 interest
A = P + I future value
t = 1 year
r = ? the annual interest rate
A = P(1 + r*t)
P + I = P(1 + r*t)
1366.87 + 119.95= 1366.87(1 + r*1)
r = 0.0878 or 8.78%
click here to see the step by step solution of the equation
the interest rate is 8.78%.