SOLUTION: The formula for calculating simple interest is I=prt, where I is the amount of interest, p is the amount invested, r is the annual rate of interest, and t is the time in years. Sup

Algebra ->  Equations -> SOLUTION: The formula for calculating simple interest is I=prt, where I is the amount of interest, p is the amount invested, r is the annual rate of interest, and t is the time in years. Sup      Log On


   

Question 949243: The formula for calculating simple interest is I=prt, where I is the amount of interest, p is the amount invested, r is the annual rate of interest, and t is the time in years. Suppose that you invested $1200 for a period of six years and earned $396 simple interest. What was the annual rate of interest?
a. 0.055%
b. 18%
c. 0.55%
d. 5.5%
Answer by MathLover1(20849) About Me  (Show Source):
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The formula for calculating simple interest is
I=prt, where I+is the amount of interest, p is the amount invested, r+is the annual rate of interest, and t is the time in years.
Suppose that you invested $1200 for a period of six years and earned $396 simple interest. What was the annual rate of interest?
given:
$I=396
$p=1200
t=6
find r+
I=prt .......plug in given values
396=1200%2Ar%2A6.....solve for r
396=7200%2Ar
396%2F7200=r
r=0.055 or r=5.5%

so, your answer is option d. 5.5%