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Mr. Flores opened an account with a deposit of $5,000.


• The account earned annual simple interest.

• He did not make any additional deposits or withdrawals.

• At the end of 4 years, the balance of the account was $6,500.


What is the annual interest rate on this account?

A. 5.8%

B. 7.5%

C. 3.3%

D. 1.9%

Respuesta :

osahondaniel30

Answer:

B. 7.5%

Step-by-step explanation:

First, we need the Simple Interest (S.I)

Total = Principal + Simple Interest

T = P + S.I

6500 = 5000 + S.I

[make S.I the subject of the formula]

S.I = 6500 - 5000

S.I = 1500

Simple Interest = (Principal × Rate × Time) / 100

S.I = (P × R × T) / 100

1500 = (5000 × R × 4) / 100

1500 = 20000R / 100

1500 = 200R

[divide both sides of the equation by 200]

1500 / 200 = 200R / 200

R = 1500 / 200

R = 7.5

The annual interest rate is 7.5%

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