Answer : The interest rate have been 8 %
Step-by-step explanation :
First we have to calculate the simple interest.
As we know that:
Simple interest = Total amount - Principle
Simple interest = $130,000 - $50,000
Simple interest = $80,000
Now we have to calculate the interest rate.
Using simple interest formula:
[tex]S.I=\frac{PRT}{100}[/tex]
where,
S.I = simple interest = $80,000
P = principle = $50,000
R = interest rate = ?
T = time = 20 years
Now put all the given values in the above formula, we get:
[tex]\$ 80,000=\frac{\$ 50,000\times R\times 20years}{100}[/tex]
[tex]R=\frac{\$ 80,000\times 100}{\$ 50,000\times 20years}[/tex]
[tex]R=8\%[/tex]
Therefore, the interest rate have been 8 %
