At what rate was an invesment made that obtains ₱2,520 on ₱10,500 over four years

To find the rate of interest at which the investment grows, we can use the formula for simple interest:

\[
I = P \times r \times t
\]

Where:
- \( I \) is the interest earned (₱2,520),
- \( P \) is the principal (₱10,500),
- \( r \) is the rate of interest (unknown),
- \( t \) is the time (4 years).

We need to solve for \( r \), the rate of interest.

First, solve for \( r \) using the simple interest formula:

\[
r = \frac{I}{P \times t}
\]

Now, substitute the given values into the equation:

\[
r = \frac{2,520}{10,500 \times 4}
\]

Let's calculate this.

\[
r = \frac{2,520}{42,000} = 0.06
\]

So, the rate of interest is \( 0.06 \), or **6% per year**.

Would you like further details or have any questions?

Here are five related questions to expand on this:
1. How does compound interest differ from simple interest?
2. What happens to the interest earned if the rate increases to 8% over the same period?
3. How can inflation impact the real return on investments?
4. What would be the final amount if the rate of interest is compounded annually?
5. How can you calculate the interest rate if you're given the final amount instead of the interest earned?

**Tip:** Always make sure to distinguish between simple and compound interest, as they yield different returns over time!

At what rate was an investment made that obtains ₱2,520 on ₱10,500 over four years?

Learn how to calculate the interest rate for an investment that earns ₱2,520 on a principal of ₱10,500 over four years using the simple interest formula. This problem involves key financial concepts such as simple interest and interest rate calculations. Suitable for students in Grades 9-10.

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