Mike deposited $4,000 in a savings account with simple interest. Two years later, he had earned $1,200 in interest. What was the interest rate? _____ %.

Question

Mike deposited $4,000 in a savings account with simple interest. Two years later, he had earned $1,200 in interest. What was the interest rate?

Use the formula i = prt, where i is the interest earned, p is the principal (starting amount), r is the interest rate expressed as a decimal, and t is the time in years.

_____ %

Quizzma Team · Answer

To find the interest rate, we can use the formula:

[ i = prt ]

Where:

– ( i ) = interest earned = $1,200

– ( p ) = principal = $4,000

– ( r ) = interest rate (as a decimal)

– ( t ) = time in years = 2

First, we can rearrange the formula to solve for ( r ):

[ r = frac{i}{pt} ]

Substituting the known values into the formula:

[ r = frac{1200}{4000 times 2} ]

Now calculate the denominator:

[ 4000 times 2 = 8000 ]

So, now we calculate:

[ r = frac{1200}{8000} = 0.15 ]

To express ( r ) as a percentage, we multiply by 100:

[ r = 0.15 times 100 = 15% ]

Therefore, the interest rate is 15%.

Mike deposited $4,000 in a savings account with simple interest. Two years later, he had earned $1,200 in interest. What was the interest rate? _____ %.

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