SOLUTION: 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?

Question 61370: 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?
Found 2 solutions by stanbon, tutorcecilia:
Answer by stanbon(75887) (Show Source): You can put this solution on YOUR website!
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?
Interest = Principal * rate * time
400 = 5000*r*4
1/50=r
r=2/100
r=2%
Cheers,
Stan H.
Answer by tutorcecilia(2152) (Show Source): You can put this solution on YOUR website!
I=Prt [use the formula for computing simple interest]
$400=(5000)(r)(4) [solve for r]
400=20,000r
400/20,000=r
.02=r
.02x100%=2%

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