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 61555: 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?
Answer by tutorcecilia(2152) (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?
I=Prt [use the formula for simple interest]
$400=($5000)(r)(4) [plug-in the values and solve for r
400=20,000r
400/20,000=4
.02=r
(.02)(100%)=2% interest
.
[check by plugging in all of the values back into the original equation]
400=(5000)(.02)(4)
400=400 [checks out]
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