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2. Determine the Simple Interest Rate for Each Investment Round Your Answers to One Decimal Place,where Necessary. A) 4000 Grows to

Question

2. Determine the simple interest rate for each investment Round your answers to one decimal place,where necessary. a) 4000 grows to 5000 in 10 years.

Solution

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Answer

### 2.5%

Explanation

## Step 1: Calculate the interest earned.### The interest earned is the difference between the final amount and the principal amount. 5000 - \ 1000 I = Prt I P r t I = \ , 4000 t = 10 r 1000 = 4000 \cdot r \cdot 10 1000 = 40000r r = \frac{1000}{40000} = \frac{1}{40} = 0.025 0.025 \times 100\% = 2.5\%$.