Problema Solution
you invest $500 for 3 years and receive $60 in simple interest. what is the annual interest rate. use the formula for simple interest I=p.r.t where I is the interest, p is the principal, r is the annual interest rate, and t is the time in years
Answer provided by our tutors
I=p.r.t
principal p=$300
interest i=$60
time t=3yrs
60=500.r.3
hence r=0.04
so the rate of interest is 4% per annum.