What annual simple interest rate would be needed for $55,000 to grow to $60,000 over a term of 295 days?
A) 12.34%
B) 10.31%
C) 11.25%
D) 9.09%
E) 8.33%

Question

Quizplus · Accepted Answer

The formula for simple interest is I = P * r * t, where I is the interest, P is the principal, r is the annual interest rate, and t is the time in years. In this case, we have P = $55,000, I = $60,000 - $55,000 = $5,000, and t = 295 days / 365 days/year = 0.8082 years. Solving for r, we get r = I / (P * t) = $5,000 / ($55,000 * 0.8082) = 0.1125 = 11.25%.

What Annual Simple Interest Rate Would Be Needed for $55,000