SOLUTION: Can someone help me on this problem? A principal of $5,000 was invested in a savings account for 4 years. If the interest earned for the period was $400, what was the interes

Algebra ->  Percentages: Solvers, Trainers, Word Problems and pie charts -> SOLUTION: Can someone help me on this problem? A principal of $5,000 was invested in a savings account for 4 years. If the interest earned for the period was $400, what was the interes      Log On


   

Question 54949: Can someone help me on this problem?
A principal of $5,000 was invested in a savings account for 4 years. If the interest earned for the period was $400, what was the interest rate?
Thanks,
Sher
Answer by funmath(2933) About Me  (Show Source):
You can put this solution on YOUR website!
Hi Sher,
The formula for simple interest is:highlight%28I=PRT%29 where I=interest, P=principle, R=rate, and T=time.
You want to solve for rate, so solve your formula for R:
I=PRT
I%2FPT=PRT%2FPT
I%2FPT=R
R=I%2FPT
A principal of $5,000 was invested in a savings account for 4 years. If the interest earned for the period was $400, what was the interest rate?
P=5000, T=4, I=400
R=400%2F%285000%2A4%29
r=400%2F20000
r=.02
If you need this expressed as a percentage, r=.02*100%=2%
Happy Calculating, Sher!!!