what was the interest rate if your balance on a investment of ₱27,750 at the end six year is ₱39,405
Answer (1)
We are given:Principal (original investment) = ₱27,750Balance after 6 years = ₱39,405Time = 6 yearsWe need to find the interest rate.Step 1: Find the total amount of interest earned[tex]\text{Interest} = \text{Final Balance} - \text{Principal}[/tex][tex]\text{Interest} = 39,405 - 27,750 = 11,655 [/tex] Step 2: Decide if it’s Simple Interest or Compound InterestSince it’s not stated, let’s solve it first using simple interest. Simple Interest formula:[tex]I = P \times r \times t[/tex] I = Interest,P = Principal,r = rate (per year),t = time in years. Step 3: Substitute the values[tex]11,655 = 27,750 \times r \times 6[/tex][tex]11,655 = 166,500r[/tex] Step 4: Solve for [tex]r = \frac{11,655}{166,500}[/tex][tex]r = 0.07 \; \text{or} \; 7\% \text{ per year}[/tex] ➤ The interest rate is 7% per year (assuming simple interest)[tex].[/tex]
