we know that
The simple interest formula is equal to
[tex]A=P(1+rt)[/tex]
where
A is the Final Investment Value
P is the Principal amount of money to be invested
r is the rate of interest
t is Number of Time Periods
in this problem we have
[tex]t=5\ years\\ P=\$8,500\\ A=\$10,093.75\\r=?[/tex]
substitute in the formula above
[tex]10,093.75=8,500*(1+r*5)[/tex]
solve for r
[tex]5*r=(10,093.75/8,500)-1[/tex]
[tex]r=0.0375[/tex]
[tex]r=3.75\%[/tex]
therefore
the answer is
the rate of interest is [tex]3.75\%[/tex]
