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What annual simple interest rate will increase Jacob Davidson’s initial investment of $5,000 to $6,000 in two years?

multiple choice

A)10%


B)5%


C)4%


D)6%

Verified Answer :

a its 10 percent because of the amount of money he has in his account  

Answer:

Hence, the annual simple interest rate is:

10%

Step-by-step explanation:

The initial investment(I) of Jacob Davidson=$ 5000.

Time(T)=2 year.

Interest(I') earned by him=His income after investment-His initial investment.

                                    = $ (6000-5000)

                                    = $ 1000.

Now, the rate of interest(R) is given by :

\(I'=\dfrac{I\times R\times T}{100}\\\\\\1000=\dfrac{5000\times R\times 2}{100}\\\\1000=100R\\\\R=10\%\)

Hence, the annual simple interest rate is:

10%

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