Determine the rate of return for the following investments. b. A five year $10000 CSB that pays simple interest of 7.8% per year.  

To determine the rate of return for a five-year Canada Savings Bond (CSB) that pays simple interest at 7.8% per year, we can use the formula for simple interest:

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

Where:
- $I$ is the interest earned,
- $P$ is the principal amount (the initial investment),
- $r$ is the interest rate per year (as a decimal),
- $t$ is the time in years.

### Step 1: Identify the given values
- Principal ($P$): $10,000
- Interest rate ($r$): 7.8% or 0.078 as a decimal
- Time ($t$): 5 years

### Step 2: Calculate the interest earned
\[
I = 10000 \times 0.078 \times 5
\]
\[
I = 10000 \times 0.39 = 3900
\]

So, the interest earned over 5 years is $3,900.

### Step 3: Calculate the total amount
The total amount after 5 years is:
\[
A = P + I = 10000 + 3900 = 13900
\]

### Step 4: Calculate the rate of return
The rate of return is the ratio of the profit (interest earned) to the initial investment. It is given by:
\[
\text{Rate of Return} = \frac{I}{P} \times 100 = \frac{3900}{10000} \times 100 = 39\%
\]

Thus, the rate of return over the 5 years is **39%**.

Would you like more details or have any further questions?

Here are 5 related questions for practice:
1. What would be the interest if the rate was compounded annually?
2. How would the total amount change if the interest rate was 5%?
3. What is the simple interest formula, and how does it differ from compound interest?
4. If the interest rate were increased to 10%, what would the rate of return be?
5. How does the length of time affect the total interest earned in simple interest?

**Tip**: Always remember that in simple interest, the interest is calculated only on the initial principal, not on the accumulated interest.

Determine the rate of return for the following investments. A five-year $10000 CSB that pays simple interest of 7.8% per year.

Learn how to calculate the rate of return for a $10,000 investment over 5 years, with simple interest at 7.8% per year. Step-by-step explanation, including the simple interest formula and the rate of return calculation. Perfect for students in Grades 9-12.

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