## Thinking Mathematically (6th Edition)

This is the formula we use when we make calculations with simple interest: $A = P~(1+rt)$ $A$ is the future value $P$ is the present value $r$ is the interest rate $t$ is the number of years We can find the annual interest rate $r$. $A = P~(1+rt)$ $rt = \frac{A}{P}-1$ $r = \frac{\frac{A}{P}-1}{t}$ $r = \frac{\frac{\$851}{\$552}-1}{\frac{1}{12}}$ $r = 6.5 = 650\%$ The annual interest rate is 650%