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You invest $5,000 in an account simple interest. The balance after 6 years is $6,200. What is the interest rate?

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2 Answers

From the simple interest equation, I=PRT, you're solving for R.  The answer will be in decimal form.  Multiply by 100 to get the percent interest.  First though, I is not the total amount you have after 6 years ($6200) but the amount you earned ($1200).

 

1200 = 5000 * R * 6

1200 = 30000 * R

R = 0.04 or 4%

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