Question 1133598: If the simple interest on a sum equals to 1/10 of itself in 4 years, find the rate percent. Found 2 solutions by htmentor, MathTherapy:Answer by htmentor(1343) (Show Source):
You can put this solution on YOUR website! If the interest earned is 1/10 of the initial principal, P0, then the amount after 4 years is P = 1.1*P0.
The simple interest formula, for yearly compounding, is
P = P0(1+r)^n where r = the interest rate, n = the number of years
Thus 1.1 = (1+r)^4
Solve for r:
1.1^(1/4) - 1 = r -> r = 0.0241, or 2.41%.
