At what rate was an investment made that obtains P 2,520 on P10,500 over four years?

To find the rate of return on an investment, we can use the simple interest formula:

\[
A = P(1 + rt)
\]

Where:
- \( A \) is the total amount after interest (in this case, \( 2,520 + 10,500 = 13,020 \)),
- \( P \) is the principal or initial investment (in this case, \( P = 10,500 \)),
- \( r \) is the interest rate (what we need to find),
- \( t \) is the time the money is invested or borrowed for (in this case, \( t = 4 \) years).

We can rearrange the formula to solve for \( r \):

\[
r = \frac{A - P}{Pt}
\]

Now substitute the known values:

\[
r = \frac{13,020 - 10,500}{10,500 \times 4}
\]

Let's calculate it.The rate of return on the investment is 6% per year.

Would you like more details or have any questions? Here are some related questions to consider:

1. What is the difference between simple and compound interest?
2. How would the result change if the investment period was 5 years instead of 4?
3. What is the formula for compound interest, and how does it apply to investments?
4. How does inflation affect the real rate of return on investments?
5. Can the rate of return be negative, and what would that mean for the investment?

**Tip**: Always compare the rate of return on investments to inflation to assess the real value gained.

Find out how to calculate the rate of return on an investment that earns P2,520 on an initial P10,500 over four years using the simple interest formula. This problem covers key algebraic concepts and simple interest calculation. Suitable for high school students in Grades 9-12.

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