What was the interest rate if your balance on an investment of₱27,750 of the end of sixyears is ₱41,070?
Answer (1)
The simple interest rate 8%.To determine the interest rate for an investment of ₱27,750 that grows to ₱41,070 over six years, we can use the formula for computing simple interest rates: [tex]A = P(1 + rt)[/tex][tex]A[/tex] = is the final amount (₱41,070)[tex]P[/tex] = the principal amount (₱27,750)[tex]r[/tex] = the annual interest rate (as a decimal)[tex]t[/tex] = the time in years (6 years)[tex]A = P (1 + rt)[/tex][tex]41070 = 27750 (1 + r[/tex]·[tex]6)[/tex][tex]1 + 6r = \frac{41070}{27750}[/tex][tex]6r = 1.480 - 1[/tex][tex]6r = 0.480[/tex][tex]r = \frac{0.480}{6}[/tex][tex]r = 0.08[/tex][tex]r = 8%[/tex]
