. What simple interest rate will Susan need to secure to make $2,500 in interest on a $10,000 principal over 5 years?

Question

 . What simple interest rate will Susan need to secure to make $2,500 in interest on a $10,000 principal over 5 years? 

Answer 1

the underlying simple interest formula that you want to use to solve this one is

I = PRT

solving that for "R" yields

R = I / PT

for this situation we have

R = 2500 / (10000 x 5) = 2500 / 50000 = 0.05 x 100% = 5%, meaning that she will need to secure a simple interest rate of 5.0%

Answer 2

i=p*r*t (interest=principal*rate*time)

2500=10,000*r*5

2500=50,000*r

2500/50,000=r

1/20=r (simplify 2500/50,000)

1/20=5/100=5 %

r=5 %