Question

700 amount
interest rate ?
years 2
interest paid 87.50

Answer 1

To find the interest rate given the principal amount, time, and interest paid, you can use the formula for simple interest:

\[
\text{Interest} = \text{Principal} \times \text{Rate} \times \text{Time}
\]

In this case, you have:

- Interest (I) = $87.50
- Principal (P) = $700
- Time (T) = 2 years

You need to find the interest rate (R).

First, rearranging the formula gives:

\[
R = \frac{I}{P \times T}
\]

Substituting the known values:

\[
R = \frac{87.50}{700 \times 2}
\]

\[
R = \frac{87.50}{1400}
\]

\[
R = 0.0625
\]

To express the interest rate as a percentage, multiply by 100:

\[
R = 0.0625 \times 100 = 6.25\%
\]

So, the interest rate is **6.25%**.