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QUESTION 1

If you pay $5,250 for a simple interest note that will be worth $6,500 in 21 months, what annual simple interest rate will you earn?
12.4%
13.6%
15.8%
14.3%

Sagot :

Based on the information given, the simple interest rate that will be earned will be 13.6%.

  • Principal = $5250
  • Simple Interest = $6500- $5250 = $1250
  • Time = 21 months = 1.75 years.

Simple Interest = PRT / 100

1250 = (5250 × 1.75 × R) / 100

Cross multiply

125000 = 9187.5R

R = 125000 / 9187.5

R = 13.6%

Read more on simple interest on:

https://brainly.com/question/24429956

anthougo

The annual simple interest rate that an investment of $5,250 will earn to be worth $6,500 in 21 months is 13.6%.

What is simple interest?

Simple interest refers to the interest calculated only on the principal.

With the simple interest method, the borrower only pays interest on the principal without considering the previously-accumulated interests.

Data and Calculations:

Principal = $5,250

Future value = $6,500

Period or time = 21 months or 1.75 years (21/12)

Simple interest = $1,250 ($6,500 - $5,250)

Rate = Interest x 100/Principal x Time

Rate = 13.6% ($1,250 x 100/$5,250 x 21/12)

Thus, the annual simple interest rate that an investment of $5,250 will earn to be worth $6,500 in 21 months is 13.6%.

Learn more about simple interests at https://brainly.com/question/2294792

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