The simple interest formula is
i = p*r*t
where
i = interest earned
p = principal (amount deposited)
r = interest rate in decimal form
t = time in years
In this case,
i = 1200
p = 5000
r = unknown
t = 4
so,
i = p*r*t
1200 = 5000*r*4
1200 = 5000*4*r
1200 = 20000*r
1200/20000 = r
0.06 = r
r = 0.06
Convert 0.06 to percent form by moving the decimal point over to the right two spots
so we go from 0.06 to 6.0% which is simply 6%
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Answer: 6%
