Question

Rudy invested $2460 in a money market account for 3 and 1/2 years. He earned $452 in simple interest. Which best represents the annual interest rate?

A. 3 and 3/5 percent
B. 5 and 1/4 percent
C. 5 and 3/4 percent
D. 6 and 2/5 percent

Answer 1

B. 5 and 1/4 percent

Explanation:

Step one:

given

principal= $2460

time= 3 and 1/2 years= 3.5 years

SI= $452

Required

The rate

Step two:

we know that

SI= PRT/100

substituting our data we have

452= 2460*R*3.5/100

452=8610R/100

cross multiply

452*100= 8610R

divide both sides by 8610

45200/8610= R

R= 5.25%

R= 5 and 1/4 percent