What annual simple interest rate will increase Jacob Davidso

What annual simple interest rate will increase Jacob Davidson’s initial investment of $5,000 to $6,000 in two years? (Hint: Use the formula I = prt and substitute known values to find I.)

Solution

prinipal p = 5000 since this is our intial amount

si = 6000-5000 =1000

time t = 2 years

si = prt/100

100*si/pt =r

r= 100*1000/5000*2

=10 percent per annum