Ed plans to receive $2000 interest in 200 days on his investment of $40 000. At what interest rate should he plan to invest?
A) 9.1%
B) 9.6%
C) 34.7%
D) 10%
E) 20%

Question

Quizplus · Accepted Answer

The interest rate can be calculated using the formula for simple interest: $I = PRT$, where $I$ is the interest earned, $P$ is the principal amount, $R$ is the rate of interest per year, and $T$ is the time in years. Rearranging the formula to solve for $R$, we get $R = \frac{I}{PT}$. Given $I = \$2000$, $P = \$40,000$, and $T = \frac{200}{365}$ years (since there are 365 days in a year), we can calculate $R$ as follows: $R = \frac{\$2000}{\$40,000 \times \frac{200}{365}} = 0.091$ or $9.1\%$.

Ed Plans to Receive $2000 Interest in 200 Days on His