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Sagot :
ANSWER
The interest rate is 150%
EXPLANATION:
Given that;
The initial amount is $5000
The total amount $20, 000 after 2 years
Total period of the investment is 2 years
To find the interest rate, follow the steps below
1. Find the interest on the investment after two years
In the given data,
The initial amount (principal) is $5000
The total amount after 2 years is $20, 000
Recall that,
Total amount = Interest + principal
20, 000 = interest + 5000
subtract 5000 from both sides of the equation
20, 000 - 5,000 = interest + 5000 - 5000
15,000 = interest
Therefore, the interest on the investment after 2 years is $15, 000
Step 2; Find the interest rate using the simple interest formula
[tex]\text{ I }=\text{ }\frac{P\times R\times T}{100}[/tex]Where
I is the interest
P is the principal
R is the interest rate
T is the time of the investment
[tex]\begin{gathered} \text{ 15, 000 }=\text{ }\frac{5000\times\text{ r}\times\text{ 2}}{100} \\ \text{ } \\ \text{ 15000 }=\text{ }\frac{10,000r}{100} \\ \text{ 15, 000 }=\text{ 100r} \\ \text{ Divide both sides by 100} \\ \frac{15,000}{100}\text{ }=\text{ }\frac{100r}{100} \\ \text{ r }=\text{ 150\%} \end{gathered}[/tex]Therefore, the interest rate is 150%
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