Ada invest 600 dollars in an account that earns simple interest. at the end of 3 years the investment is worth dollars 681. calculate the rate of simple interest per year.
To calculate the rate of simple interest per year, we can use the formula:
I = P * r * t
where:
I = the amount of interest earned
P = the principal (initial investment)
r = the rate of interest per year
t = the time period in years
Given that Ada invested $600 and the investment earned $681 at the end of 3 years, we can plug in the values into the formula:
681 = 600 * r * 3
Rearranging the equation to solve for r:
r = 681 / (600 * 3)
r = 0.3775
Therefore, the rate of simple interest per year is 0.3775 or 37.75%.