A principal of $5000 was invested in a savings account for 4 years. If the interest earned for the period was $400, what was the interest rate?
i know this is 1.5 % or at least I think it is but how do i write it out?
Use the equation I=Prt, where I=interest earned, P=principal amount, r=rate, and t=time.
400=5000*4*r
400=20000r
0.02=r
So, from what is shown here, your answer was incorrect. It is 2%, and you also showed your work. Hope this works :-)
Sorry, the above post was by me, not "Anonymous". LOL
No problem! Let's go through the calculation again and determine the correct interest rate.
To find the interest rate, we can rearrange the formula I = Prt and solve for r:
r = I / (Pt)
Here, I is the interest earned ($400), P is the principal amount ($5000), and t is the time period (4 years). Plugging in these values, we get:
r = 400 / (5000 * 4)
r = 0.02 or 2%
So, the correct interest rate is 2%.