Elementary Algebra

Published by Cengage Learning
ISBN 10: 1285194055
ISBN 13: 978-1-28519-405-9

Chapter 4 - Proportions, Percents, and Solving Inequalities - 4.2 - Percents and Problem Solving - Problem Set 4.2: 58

Answer

The annual interest rate is 0.06, or 6%.

Work Step by Step

The interest formula is: I = P $\times$ r $\times$ t To find the annual interest rate, or r, we divide I by P $\times$ t So, r = $\frac{I}{P\ \times\ t}$ I = 1260 P = 7000 t = 3 Substitute these values in the formula to obtain: r = $\frac{1260}{7000\ \times\ 3}$ r = $\frac{1260}{21000}$ r = 0.06 The annual interest rate is 0.06, or 6%.
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