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?

Algebra ->  Algebra  -> Coordinate Systems and Linear Equations -> 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?       Log On

Ad: You enter your algebra equation or inequality - Algebrator solves it step-by-step while providing clear explanations. Free on-line demo .
Ad: Algebra Solved!™: algebra software solves algebra homework problems with step-by-step help!
Ad: Algebrator™ solves your algebra problems and provides step-by-step explanations!

   

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(48545) About Me  (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(2144) About Me  (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%