Question 95044
Use the formula for simple interest:
Interest = (Principle)(rate)(time)  [plug-in the values and solve for the missing variable]
.
$400=($5,000)(rate)(4 years)
400=(20,000)(rate)
400/20,000=(20,000)(rate)/(20,000)
.02=rate
(.02)(100%)=rate
2%=rate
.
Checking:
I=Prt
400=(20,000)(.02)(4)
400=400 [checks out]


A principal of 5000 was invested in a savings account for 4 years. If the intrest earned for the period was $400.,what was the intrest rate?