Question 1)
Given
Interest I = $18
Principle P = $200
t = 1.5 years
To determine
Interest rate r = ?
Using the formula
[tex]P = Irt[/tex]
[tex]r=\frac{I}{Pt}[/tex]
susbtituting I = 18, t = 1.5 and P = 200
[tex]r=\frac{18}{\left(200\times 1.5\right)}[/tex]
[tex]r = 0.06[/tex]
or
r = 6% ∵ 0.06 × 100 = 6%
Therefore, we conclude that the interest rate required to accumulate simple interest of $18.00 from a principal of $200 over 1.5 years is 6% per year.
Question 2)
Given
Interest I = $60
Principle P = $750
Interest rate = 4% = 0.04
To determine
Time period t = ?
Using the formula to calculate the time period
[tex]P = Irt[/tex]
[tex]t\:=\:\frac{P}{Ir}[/tex]
[tex]t=\frac{60}{\left(750\times 0.04\right)}[/tex]
[tex]t = 2[/tex] years
Therefore, the time required to accumulate simple interest of $ 60.00
from a principal of $ 750 at an interest rate of 4% per year is 2 years.
