A man earns $112 interest in one year on an investment of $1,400. What was his rate of interest?
1 Answer
Oct 23, 2016
R = $112 / $1400 which solves to a rate of 0.08 or multiplying it by 100 to make a percentage 8%.
Explanation:
Assuming no compound interest:
I = R * P; Where
I = Interest Earned
R = Rate of Interest
P = Principle Invested
In this question we know I (Interest Earned) and P (Principle Invested) therefore:
$112 = R * $1400
Solving for R gives you:
R = $112 / $1400 which solves to a rate of 0.08 or multiplying it by 100 to make a percentage 8%.
