Question #8cdcd
2 Answers
the interest rate = 2.75%/year
Explanation:
Equation:
r = (1/t)(A/P - 1)
Solving our equation:
r =
r =
Converting r decimal to R a percentage
R =
R =
The interest rate required to get a total amount, principal plus interest, of $2,260.50 from simple interest on a principal of $2,200.00 over 1 years is 2.75% per year.
Full explanation given.
Explanation:
The amount of interest earned is:
So as a fraction we have
Percentage is just a fraction. However it is a special fraction in that the bottom number (denominator) is always fixed at 100.
With what follows notice the way the units of measurement ($) cancel out and we are left with just numbers.
So we need to change
How can we change 2200 into 100?
We can do this:
In a fraction, for multiply and divide, what we do to the bottom we also do to the top. So we also have to multiply the top in the same way.
Note that
So
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And then 'stick' a % on the end