Question

Arthur has $19,500 to invest, and wishes to gain $8,000 in interest over eleven years. Approximately what is the minimum simple interest rate that Arthur needs to achieve his goal?
a.
2.64%
b.
3.04%
c.
3.72%
d.
4.51%

Answer 1

Use simple interest I = Prt, so r = I/(Pt) = 8000/(19500·11) = 16/429 ≈ 0.0373 = 3.73%.
Closest choice: c. 3.72%.