Ok my last question for this Interest stuff Woo! Ok this is the question:
What is the annual interest rate if $1600 is invested for 6 years and $456 in interest is earned?
Assuming compound interest with a period of 1 year, the annual rate would be 4.3%
Annual Interest Rate =((1600/456)/6 )* 100
= 4.75%
To find the annual interest rate for this investment, we can use the formula:
Interest = Principal x Rate x Time
In this case, the principal (the initial amount invested) is $1600, the time is 6 years, and the interest earned is $456. We need to solve for the rate.
First, we rearrange the formula to solve for the rate:
Rate = Interest / (Principal x Time)
Now, we can substitute the given values into the equation:
Rate = $456 / ($1600 x 6)
Multiply the principal by the time:
Rate = $456 / $9600
Divide the interest by the principal multiplied by the time:
Rate = 0.0475
Lastly, multiply the result by 100 to convert it into a percentage:
Rate = 0.0475 x 100 = 4.75%
Therefore, the annual interest rate is 4.75%.